So far, it is fair to say that the pace of policy tightening over recent months (900 bps) has disappointed market expectations. And another 250 bps rate hike to 20% in the one-week repo today would still leave real rates deeply in negative territory given inflation is running at close to 50%.

While 35% implied yield through the three-month forwards does make the Lira a high yielder, it does not seem as though the TRY has yet attracted international demand for the popular carry trade. 

If the central bank can bring inflation and inflation expectations down, making real rates far less negative, then the Lira could start to find some broader support. Otherwise, gradual depreciation on the back of high inflation looks to be the most likely path.