JPMorgan Chase analysts now expect Turkey's central bank to hold interest rates unchanged in March after previously forecasting cuts, citing rising energy prices from the Iran conflict that threaten disinflation. Derivatives linked to rate bets surged, signaling traders anticipate a longer-term rate stance. Turkey's vulnerability to Middle East supply disruptions complicates its fight against 30.65% headline inflation (down from 42.1% a year ago but still high).

The central bank's policy meeting on March 12 could see a pause, though a truce might reverse the trend. JPMorgan raised its year-end inflation forecast to 25% and shifted from predicting a 100 basis point cut to a pause. Deutsche Bank analysts also warn the oil price shock skews inflation risks upward. Meanwhile, the lira outperformed peers as the central bank tightened liquidity, though it remained weak against the dollar.