Word by word, Turkey is starting to dismantle the playbook it used to halt a run on the lira.

With a recession looming, the central bank toned down its pledge to keep borrowing costs elevated and changed its assessment of inflationary pressures. While its benchmark was kept steady at 24 per cent for a second meeting on Thursday, the tweaks increase the odds of an interest-rate cut ahead of the municipal elections in March, according to Nomura International Plc.

“The partial but unmistakable softening of the rhetoric should keep those concerns alive,” Nomura economist Inan Demir said by email. “We think the central bank should stay on hold well into the second half of 2019. However, we acknowledge the risk of earlier easing as the accumulation of negative growth indicators is likely to strengthen calls for lower rates.”

Governor Murat Cetinkaya has until recently emphasised that tight policy was needed for an extended period of time. But investor fears over a “premature” rate cut have returned as the economy’s fortunes turned sharply lower and the lira stabilised. The central bank’s shifting stance supports the view that it’s now bracing for a severe downturn.

The lira rallied briefly on the decision to leave rates unchanged, then erased gains after the market absorbed the changes in guidance. After rising initially as much as 0.8 per cent, the Turkish currency was trading little changed at 6:35pm in Istanbul.

In the past, Turkey’s central bank has had to confront political pressure at home for lower borrowing costs. Meanwhile, investors have criticised it for being too quick to undo tightening and too slow to respond to risks, most recently in August when the lira lost about a quarter of its value.

The most striking departure from the central bank’s previous language on the path for rates was an omission of the word “decisively” in its pledge to keep monetary policy tight. It also dialled down the gravity of the risks it sees to inflation, refraining from calling them “significant” or stating that price increases are showing “a generalised pattern.”

“At first glance, the statement published by the central bank is not significantly different compared to the one published in October,” Rabobank strategist Piotr Matys said by email. However, “the fact that the central bank dropped ‘decisively’ can fuel market speculation about an early rate cut,” which would weigh on the Turkish currency, he said.

To be sure, policymakers said their stance is still restrictive and that further steps to curb access to credit would be taken when needed.

The Monetary Policy Committee “has decided to maintain the tight monetary policy stance until the inflation outlook displays a significant improvement,” it said. “While developments in import prices and domestic demand conditions have led to some improvement in the inflation outlook, risks for price stability continue to prevail.”