A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer
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President Recep Tayyip Erdogan's silence on interest rates is doing little to soothe market worry that Turkey's central bank could act too soon to loosen policy.In the derivatives market, the one-year dollar-lira swap contract has traded near the lowest since early August. It's been under 23 percent for two weeks, a percentage point below the central bank's benchmark and a sign that traders have unwound their bets for monetary tightening and started to price in cuts over the next 12 months.The central bank watched in August as the lira buckled, before pulling off a dramatic rate hike of 625 basis points the following month.For now, only one economist in a separate Bloomberg poll predicts a cut in the second quarter of next year, with rates seen on hold until then.
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