Thirteen of 21 economists surveyed by Reuters said they expected that the Turkish central bank would bring in another rate cut at its monetary policy committee (MPC) meeting on January 16.

The central bank has aggressively halved its policy rate to 12% since July last year. However, Turkey’s consumer price index (CPI) inflation reached 11.84% in December and the national lender last year tied its policy stance to delivering a "reasonable" real interest rate.

Six of the respondents in the survey predicted a cut taking the benchmark rate to 11%. Seven expected a rate cut of some sort. The median estimate was for a cut of 50 bp, while the biggest expectation was for a 125-point cut.

The central bank has said that its monetary easing was in line with the projected disinflation path and that it has in the past half-year used a significant amount of leeway to loosen policy to boost Turkey’s recovery from recession.

Haluk Burumcekci, of Burumcekci Consulting, was cited as saying that the central bank's recent communication has confused economists.

"It said the last time that [policy] was in line [with the targeted disinflation path]... but we've seen up to now that this does not prevent rate cuts," he observed, noting the bank's track record last year of cutting rates by more than anticipated.

Burumcekci predicted a 100-point cut, but said some economists expected a pause to cuts because of recent lira and swaps volatility caused by growing tensions between Iran and the US.

If the central bank cuts rates, he added, "I am guessing that it will probably not give a very clear signal" of the future policy plan.

President Recep Tayyip Erdogan, a self-described "enemy" of interest rates—who asserts the unorthodox theory that high rates stoke inflation and is often accused of running Turkey’s monetary policy himself—has repeatedly said they and inflation will fall into single digits in Turkey in 2020. The government is seeking to stoke the economy with credit to obtain an ambitious 5% growth rate this year.