It will be the first policy meeting under new Governor Erkan, and there are high expectations that it will provide another important step away from unconventional policy settings in Turkey.

The CBRT is expected to deliver a significant rate hike. There is a wide range of estimates for the policy rate on Bloomberg ranging between 14.00% and 40.00%. The larger the hike, the more effective it will be at restoring policy credibility although we still expect the TRY to weaken further as it is allowed to adjust more freely to competitive levels.