Economists see Turkey’s central bank raising rates steeply at its meeting on Thursday, while offering starkly different expectations on the size of the move.

Investors and strategists have raised bets of a return to gradual economic orthodoxy as president Recep Tayyip Erdogan revamps his cabinet after securing another five-year term in May. He has also signaled some “flexibility” in monetary policy, seen as opening the way for a shift from unconventional measures that stoked an inflation crisis.

Goldman Sachs Group Inc. economists led by Waleed Mohsin see the central bank lifting its policy rate to 40% from the current 8.5%, at the June 22 meeting — which would be the first increase since March 2021. Bank of America Corp. sees Turkey’s one-week repo rate rising to 25%, although notes risk of a downside surprise, according to a report by the firm’s economists including Zumrut Imamoglu.

Deutsche Bank expects the rate to be initially raised to 20% in June, on par with the median estimate of 20% in a Bloomberg survey of 20 economists. For Bank of America and Deutsche Bank, guidance by Turkish authorities for further, less aggressive hikes in the next meetings to follow is possible.

Global Banks Try to Put a Number on Turkish Rate Hike This Month

Other factors aside from rate increases will be equally important, notes Deutsche Bank’s Christian Wietoska. He cites new central bank Governor Hafize Gaye Erkan’s communication on authorities’ commitment to monetary tightening, and management of macro-prudential measures. Bank of America’s Imamoglu expects regulations and controls to be “unwound” gradually, making the prospect of a large one-off hike that enables lifting the controls “less likely.”

Turkey’s lira has depreciated 16% since the elections on May 28.

The Turkish central bank’s monthly survey last week also showed market participants doubling their forecast for one-week repo rate to 17% from 8.5% on June 22.