The Turkish Central Bank raises interest rates by 500 basis points to 40%

Turkey’s central bank on Thursday raised its key interest rate, the benchmark one-week repo rate, by another 500 basis points to 40%.

This rise represents double the expectations of economists who expected an increase of 250 basis points.

This step was considered a continuation of the bank’s attempt to combat high and low inflation Lira, Turkish currency. The country’s inflation rate reached 61% in October.

the Lira It traded at 28.766 per dollar after the news, slightly stronger against the greenback.

Timothy Ash, emerging markets strategist at BlueBay Asset Management, was one of the few experts to forecast a 500 basis point increase.

“A truly impressive move by CBRT [Central Bank of the Republic of Turkey] “Validate their beliefs and go far beyond expectations.”

“These guys and girls are serious about fighting inflation,” he added. “We need to give them credit for that.”

The central bank’s decision follows a series of interest rate hikes that have been painful for Turks, as the country aims to overcome several years of high inflation and a significantly weak currency – due in large part to the Ankara government’s stubbornly loose monetary policy. .

The lira has fallen by 35% against the dollar since the beginning of the year, and has lost more than 80% of its value against the dollar over the past five years.

This is a breaking news story and will be updated soon.