Perhaps the FX market is getting ready for the first rate hike by CBT as a result of the new economic team taking over – Hafize Gaye Erkan as CBT governor – but can’t decide whether this will be delivered at the scheduled 22 June rate meeting, or even sooner via emergency meeting.

We are all aware that the ‘unconventionalness’ of Turkish economic policy comes straight from one man at the top. Very few, even of his loyalists, wanted to implement such policies when they were actually put in charge. Hence, now it will be a wait-and-see exercise about Erdogan’s patience with this new change. No other factor is relevant. 

The FX market mostly sees through this problem – hence, any let up in FX interventions by CBT and banks could be followed by explosive USD/TRY moves.