The vast majority of economists, ourselves included, expect a 500 bps hike. There is a minority, however, looking for a smaller 250 bps hike. A smaller hike might initially hit the Turkish Lira on the view that the CBT is reluctant to take real rates into positive territory.

However, we suspect there will be demand for Lira through the forwards market were the year-end outright to be priced substantially above 30.00. We say this because it looks like the CBT currently has the TRY locked in a managed depreciation regime, with a seeming target of around 30.00 at year-end.