Turkey Surprises With Bigger Rate Hike to Bolster Lira

Turkey’s central bank raised interest rates for the first time this year, lending support to the lira as it seeks to contain inflation in the weeks leading up to early presidential elections in June.

Policy makers increased the late liquidity window, the rate it uses to set bank funding costs, by 75 basis points to 13.50 percent, surpassing the median estimate in a Bloomberg survey for a 50 basis-point move. The lira, which has fallen against all major currencies this year, strengthened 1 percent by 4.0475 per dollar by 2:02 p.m. in Istanbul.