The Turkish Ministry of Treasury and Finance said it had mandated three banks for a five-year, dollar-denominated eurobond that bankers involved estimated would offer buyers around 6.65pc interest.

This was later revised down to a range between 6.45pc and 6.55pc. Pricing will be later on Tuesday.

"As part of the 2019 external borrowing program, the Ministry of Treasury and Finance has mandated BNP Paribas, Citigroup and HSBC for the issuance of a dollar denominated bond due 2024," the Treasury said in a statement.

Turkey has issued $6.4 billion of its $8 billion borrowing target this year, but it has stayed clear of debt markets after a squeeze on international lira trading in March, geopolitical flare-ups and a re-run of municipal elections in Istanbul caused its borrowing costs to soar.

Those costs have come down sharply again over the past eight weeks, however, as the mood has stabilised. The interest rate premium, or spread, of Turkish government bonds to US Treasuries has fallen from 600 basis points in late May to around 465 now.

The lira has rallied more than 7pc, too, including a 2.8pc leap on Monday after President Tayyip Erdogan said US President Donald Trump had indicated that no US sanctions would be imposed over Turkey's purchase of a Russian S-400 missile defence system.

The indicated 6.65pc interest rate on the new bonds is slightly above the rate for some of Turkey's existing five-year bonds, said Aberdeen Standard Investments portfolio manager Viktor Szabo.

"They are giving 15-20bps of concession (to existing bonds ) which is not great, and Turkish bonds have rallied a lot recently, so we will see what the appetite (for the new bonds) is," he said.

That rally has been so pronounced that Turkish bonds were - next to Russia - the best-performing emerging-market fixed income market in the second quarter of the year.

It has been a welcome relief, and with the country's double-digit inflation also now easing, an aggressive run of interest rate cuts looks likely.

Marcelo Assalin, head of emerging market debt at NN Investment Partners, a Netherlands-based asset manager added: "Investors will be a bit demanding in terms of premium as Turkey is a fundamentally challenged credit."

"But liquidity is in the driving seat, and the expectation of more accommodative monetary policy in Europe is driving demand for paper that offers an alternative to low-yield government bonds in Europe."