The jump in Turkish inflation to a much stronger-than-expected 58.9% y/y last month, coming shortly after bumper Q2 GDP figures, means the central bank (CBRT) is likely to follow up last month’s 750bp interest rate hike with another large move this month. Our working assumption is a 500bp increase in the one-week repo rate (to 25.00%) but, if anything, the odds may be tilting towards a bigger increase.
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