Economics
Erdogan Surrenders to Market as Emergency Hike Supports Lira
- Late liquidity window rate hiked to 16.5% at emergency meeting
- Lira reverses daily losses after sliding to record low
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Turkey’s central bank raised interest rates at an emergency meeting on Wednesday and President Recep Tayyip Erdogan pledged allegiance to global principles on monetary policy, bowing to pressure from financial markets after plunging the nation into a currency crisis.
The central bank raised its late liquidity window rate by 300 basis points to 16.5 percent, after an extraordinary meeting of its monetary policy committee. It kept other rates unchanged, describing the move as a “powerful monetary tightening” and saying it’s ready to continue using all instruments. The lira reversed losses after earlier plunging as much as 5.2 percent to a record low. It was still 17 percent weaker than at the start of the year.