Last week, Goldman Sachs released a statement which suggested that the Turkish Central Bank should increase rates if it didn’t wish the Turkish lira (TRY) to become subject to selling pressure when exchanging currency with forex.

This Thursday the Central Bank of the Republic of Turkey will meet together to consider its regulation and monetary policies options and recommending the public in Turkey to learn what is forex.

Currently, Goldman Sachs believes the bank will not increase rates above 6.25% or amend any of its bank’s capital adjustments. Consequently, Goldman Sachs has recommended its clients to hold long positions on the lira and the dollar, and now many other banks are encouraging their clients to do the same. A downturn in the TRY is therefore expected.

Economically, Turkey has always toed the line between the Middle East and Europe and is therefore conflicted. On the one hand, the ECB has recently risen; therefore, an increase in rates would be essential in order to keep in line with the rest of Europe. On the other hand, with the current Arab spring, the economy of the Middle East is suffering greatly, so a weaker currency which is in line with fellow Arab country’s could be though of as preferable.

Thursday’s meeting, then, will see those who European-minded clash with those who view Turkey as primarily a Middle Eastern country. With Recep Tayyip Erdogan — the Turkish Prime Minister — currently believed to be more in favour of lending support to Turkey’s nearby Arab countries, forex and currency rates are expected to remain the same, thus causing the TRY to slump over the next month.