The Turkish lira has been one of the worst-performing EM currencies this week which, in part at least, seems to reflect investors no longer buying the central bank’s hawkish rhetoric. Elsewhere, comments from the Russian central bank support our view that the next move in interest rates there will be down. And, despite the dovish outcome from yesterday’s ECB meeting, strong wage and price pressures mean we think that rate hikes are still more likely than not in most of Central and Eastern Europe this year.
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