US investment banks Goldman Sachs and JPMorgan said inflation in Turkey will rise after the government said it reached 61.1 percent in March, the highest level in 20 years.

Inflation in Turkey will fluctuate between 65 and 70 percent until the end of the year, after which it could slow to 44 percent, JPMorgan economist Yarkin Cebeci said.

"The CBRT (Turkish central bank) has put all its emphasis on the FX-protected deposit scheme and is unlikely to react to the CPI data no matter how strong it is," Cebeci said in e-mailed comments to clients.

Goldman Sachs estimated that inflation would hit around 67 percent in May or June and then remain above 65 percent for most of the year. It would probably end the year at 45 percent, it said.

"We also see upside risks from commodity prices and the monetary policy stance which is not geared to fighting inflation," Murat Unur of Goldman Sachs said in a note to clients, Reuters reported. “Real rates in Turkey are now deeply in negative territory and are likely to fuel inflation further in the coming months.”

Inflation in Turkey is the highest among all major emerging market and G-20 major economies.  Turkey ranks seventh among the world's countries after Venezuela, Sudan, Lebanon, Syria, Zimbabwe and Suriname.

Turkey's central bank, acting on the orders of President Recep Tayyip Erdogan, cut interest rates to 14 percent from 19 percent in the last four months of last year and has maintained them since then. He is now following what he calls a “lira-ization strategy”.

The interest rate reductions had sparked a sharp sell-off in the lira, sending the currency to successive record lows and forcing the government to introduce special lira deposits linked to the dollar in late December to calm locals. The currency lost 44 percent of its value against the dollar this year and has declined a further 10 percent since January.

The lira traded down 0.2 percent to 14.72 to the dollar on Tuesday.