Turkey Rate Increase Stems Lira Decline as Basci Defies Erdogan

The lira swung between gains and losses as traders assessed whether a doubling of interest rates would be enough to stem capital outflows in the face of further reductions in U.S. monetary stimulus. Stocks fell.

The Turkish currency strengthened more than 4 percent following the central bank’s midnight rates decision before depreciating as much as 2.4 percent. It climbed 0.5 percent to 2.2407 per dollar at 7:23 p.m. in Istanbul. Yields on two-year benchmark notes decreased 18 basis points to 10.88 percent and the Borsa Istanbul 100 Index of shares slumped 2.3 percent.