The FX market’s scepticism arises from a divergence between what authorities say Erdogan will support and what the market thinks he will support. Once this question has arisen, verbal assurances and remarks lose all significance: it becomes all about waiting and watching through tough times to confirm Erdogan’s views. 

If this assessment is correct, then today’s rate hike can at best add some volatility to the Lira, but the currency’s fundamental outlook will remain undetermined for some time longer.