Turkey’s lira hits fresh record lows after rate hike

Ankara, June 23 (BNA): The Turkish lira fell 2.8% to a new record high early on Friday, extending its losses as the central bank’s interest rate hike the day before came below market expectations.

The lira was last traded on 25.2015, about 1.3% weaker than Thursday’s close. At the weakest point of 25.59, it has been nearly 27% weaker against the greenback this year, Reuters reports.

Turkey’s central bank raised its key interest rate by 650 basis points to 15% on Thursday and said it would go further at its first meeting under new governor Hafiz Gay Erkan, who was appointed by Erdogan after winning elections last month.

The move marked a change of course after years of monetary easing as the one-week repo rate was slashed to 8.5% from 19% in 2021 in an unorthodox policy pursued despite rising inflation.

The median estimate in a Reuters poll was for interest rates to rise to 21 percent on Thursday, and analysts said the smaller move indicated Arkan may have limited room to aggressively tackle inflation under Erdogan’s watch.


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