Is Turkey really out of woods?

After having narrowly escaped a balance of payments crisis last spring, there are questions surrounding the Turkish economy, not to mention the many (geo)political tensions.

Throughout this period, the currency has continued to experience strong downward pressures, leading to a surge in inflation. Recently, the markets seem to be recovering hope.

On some fronts, the news flow has improved. Inflation has fallen, the current account deficit has come down, FX reserves have stabilised and the bottom line is that the central bank kept its rates unchanged at its last monetary policy committee held on 16 January, calling into question possible doubts about its independence.