Verbal ntervent on

To expect a susta nable pullback n USD/ TRY and EUR/TRY n the com ng months the CBRT may have to act dec s vely to restore conf dence amongst households, corporates and nvestors who reduced the r exposure as reflected n the sharp fall of stocks and bonds. The scale of a h ke would have to be s m lar to the bold act on the CBRT took n January 2014 when all ma n nterest rates were ra sed s gn f cantly h gher than ant c pated. The central bank, however, may st ll opt for a relat vely measured h ke between 50 and 100bps later th s month. Th s would be followed by another sp ke h gher n USD/TRY and EUR/TRY before the CBRT del vers a substant al dose of t ghten ng at an emergency meet ng (mostly a repeat of what happened n 2014). (Apr l 12)