Under the leadership of Governor Hafize Gaye Erkan, the MPC will face the crucial task of navigating Turkey's complex economic landscape, characterized by persistent high inflation and ongoing geopolitical tensions.

In the previous meeting held in December 2023, the CBRT surprised markets with a hefty 250 basis point increase, bringing the benchmark policy rate to 42.5%. Economists widely anticipate another hefty hike this time around, with consensus forecasts pointing towards an additional 250 basis point rise.

The CBRT faces a delicate balancing act. Aggressive rate hikes can help tame inflation, which stood at an eye-watering 85.5% in December 2023, according to official data. However, further tightening could also stifle economic growth and put additional pressure on already strained businesses and households.

Investors will be closely watching the decision for any indications of the CBRT's future monetary policy path. The lira, which has been volatile in recent months due to global economic uncertainty and regional geopolitical tensions, is likely to react sharply to the announcement.

Thursday's decision is expected to be closely scrutinized both domestically and internationally, as it could have significant implications for Turkey's economic stability and growth prospects. (ILKHA)