The upwards revision to the Turkish central bank's 2022 inflation forecast this week was just a matter of catching up with reality and the more interesting detail was the central bank’s emphasis on "lira-isation" to achieve price stability. But tackling inflation on a sustained basis will require interest rate hikes, a move that now only seems likely with a major political shift. Meanwhile, Russia's financial markets experienced another volatile week as investors' reassessed the likelihood of conflict with Ukraine. Although a lot of bad news now seems to be priced in, unless there is a major breakthrough in Russia-US talks, the risk premium on Russian assets is likely to remain high for some time.
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