Türkiye’s central bank is expected to significantly increase its key policy rate this week, according to surveys, making good on its pledge of further tightening with another sharp hike to curb inflation that is set to rise again.

The Central Bank of the Republic of Türkiye (CBRT) raised its policy rate by 650 basis points in June to 15%, while promising to continue tightening until a significant improvement in the inflation outlook is achieved.

The rate hike and the hawkish tone were the strongest signals of a reversal after two years of loose policy under the government’s economic program that prioritized growth and investments.

Last month’s interest rate-setting meeting marked the first under the new governor, Hafize Gaye Erkan.

Economists see a hike of 500 basis points this Thursday to 20%, according to the median estimate of 23 economists in a Reuters poll, with forecasts ranging between 17% and 21.50%.

A Bloomberg surveys see the benchmark one-week repo rate being lifted to 18.25%.

Türkiye’s annual inflation has eased to 38.21% as of June, marking a significant regress from a 24-year high of 85.51% last October. However, it is expected to rise again after the government hiked taxes on a wide range of goods to support the budget.

The inflation surged amid a steep depreciation in the Turkish lira that came after the country opted for an easing drive that saw the central bank slashing its key policy rate to 8.5% in February from 19% in 2021.

The central bank is expected to keep hiking rates in coming months, with the median estimate of 13 economists in the Reuters poll for the policy rate at year-end standing at 25%.

The forecasts ranged between 24% and 35%.

The central bank will announce its rate decision at 11 a.m. GMT on Thursday.