Wall Street strategists expect the Central Bank of Turkey to announce a massive rate hike today at an emergency meeting to conclude at midnight local time in Ankara.

Yesterday, as the currency hit another new all-time low against the U.S. dollar, the CBRT announced it would hold the meeting, sending the lira surging.

Despite the lira's recent slide, the central bank passed on a rate hike at a regularly-scheduled meeting last week. Many believe the inaction was the result of significant political pressure.

Now, strategists believe the CBRT will go big.

Olgay Buyukkayali, an EEMEA FX and rates strategist at Nomura, believes the central bank will hike rates by 200 basis points.

"We think policy will get simpler (or at least the success of it depends on that)," says Buyukkayali.

"The Bank may achieve this by committing to bring the marginal funding rate to 9.75%, i.e., hike the current 7.75% by 200 basis points with a hawkish bias, and keep this as the only funding rate in the next few months."

Timothy Ash, chief emerging-markets economist at Standard Bank, thinks the CBRT has to go even bigger.

"If they don't, their credibility will be shot through and the lira will go through 2.5 against the USD, and quick," he says.

"The assumption is that they have to hike policy rates, and very significantly, i.e., 3oo basis points plus, with more to come."

Others, like George Magnus, former chief economist and current senior economic adviser to UBS, believe the emergency meeting is not in fact about a rate hike at all, but about more drastic measures, such as implementing capital controls.

"It would be pretty unusual to have a meeting and a midnight statement where you were just going to announce a standard change in monetary policy," Magnus told Bloomberg News this morning.

"The odd time does suggest, to me, something that's going to be much more market-sensitive in that it will affect the operation of markets, not just the cost of funding."

Stay tuned — tomorrow night should be interesting.

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