The five-day ceasefire in Syria agreed by Turkey and the US yesterday has prompted a rally in Turkish markets and probably means that the central bank will press ahead with another large interest rate cut next Thursday. But the calm could prove temporary and the charges brought against Halkbank this week underline the vulnerability of the banking sector. Elsewhere, comments today from Russia’s central bank governor mean that we now expect a 50bp reduction (previously 25bp) in interest rates next week, to 6.50%.
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