The decision by Turkey’s central bank to hike its one-week repo rate by 475bp, to 15.00%, and pledge to provide all funding through this facility appears to have done enough to convince investors that there really is a positive shift in policymaking underway. The rally in the lira probably has a bit further to run over the coming months and we now expect the currency to end this year at 7.25/$ (previously 8.00/$).
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