Turkish central bank hikes interest rates to 50%

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Türkiye

Turkish central bank hikes interest rates to 50%

The Turkish lira rallied up to 1.5% against the dollar after the Turkish Central Bank stunned investors with an unexpected interest rate hike of 5% - 500 basis points - to combat inflation. The Bank brought rates up from 45% to 50% to combat inflation and also pledged to tighten further if inflation is persistent. The move - called hawkish by investors - came only 10 days before local elections and is seen as double message to international investors that the bank is committed to stabilising the economy AND that it is independent of the government and only determined to tackle prices. This comes off the back of a period of tightening that the bank implemented starting in June last year where it brought interest ates up from 8.5% to 45%.