Turkey's Rate Hike a Relief, But More Needed: Analyst Roundup

Turkey’s decision to boost interest rates comforted markets. But much more may be needed to stem the lira’s rout given the nation’s weak fiscal background and upcoming election.

The currency led gains among major peers on Wednesday after the central bank raised its late liquidity window rate by 300 basis points to 16.5 percent. Much of the the lira’s performance during the next few days now depends on the external environment, according to analysts. If the U.S. dollar loses steam and emerging-market currencies rebound from recent lows, the lira may follow suit. If not, it will probably remain among the weakest in developing nations, they say.