Lira Swaps Signal Turkey Will Hold Off Hiking Rates This Meeting

Swaps tied to the Turkish lira are signaling that traders have pared bets for the central bank to raise interest rates, after the ceasefire in the Iran war pushed oil prices off their highs and eased inflation fears.

The lira’s three-month overnight indexed swaps, derivatives used to bet on future borrowing costs, have slid 270 basis points from their peaks hit at the end of March, before Iran and the US agreed a truce. The contract now stands at 40.85%, down from 43.55% on March 30. The one-month contract has eased more than a percentage point to 40.15%.