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Turkish central bank not taking its foot off the pedal

The 200bp interest rate cut (to 12.0%) by the Turkish central bank as well as other recent tweaks to boost lending suggest that policymakers will try to meet President Erdogan’s demand to bring rates down to single digits and bolster growth. As a result, we have pencilled in further rate cuts at the next couple of meetings. But we still expect the central bank to start raising interest rates in the second half of next year.

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