Unorthodox policies sparked inflation crisis
Size of Thursday39;s hike uncertain, forecasts range widely
Further hikes seen this year, end2023 median at 30
Authorities hope foreign investment will return

ISTANBUL, June 21 Reuters Turkey39;s central bank is expected to raise its policy rate sharply on Thursday in a strong signal that reelected President Tayyip Erdogan has accepted some steps toward economic orthodoxy to address inflation that has soared under his watch.

The expected policy pivot, under new central bank chief Hafize Gaye Erkan, comes amid a costofliving crisis that saw inflation hit a 24year high of 85.5 in October, before declining to just below 40 last month.

The lira currency, meanwhile, has skidded to record lows since last month39;s election.

All 18 economists in a Reuters poll predicted a rise in the oneweek repo rate. But the level remains uncertain as the central bank has not given any signals as to its next steps, including the size or pace of potential hikes.

Some economists have expressed doubt about Erdogan39;s commitment to abandoning his unorthodox policy of low rates, which led the central bank to slash its policy rate from 19 in 2021 to 8.5 currently.

The median estimate was for a hike of 1,250 basis points to 21 this month. Predictions ranged from 12.50 to 30, with some economists thinking hikes will be more gradual.

The central bank39;s foreign exchange buffer has dwindled, with net reserves touching a record low of negative 5.7…