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Under new leadership, Turkish Central Bank delivers largest rate hike in two years

Following a shakeup in Turkey’s economy team, Central Bank policy-makers raised a key interest rate to 15% Thursday, pledging to fight high inflation and bolster the nation’s troubled economy.
ISTANBUL, TURKEY - NOVEMBER 09: People wait to exchange money at a currency exchange shop on November 09, 2020 in Istanbul, Turkey. Finance Minister Berat Albayrak, the son-in-law of President Erdogan who has been in the role for five years, resigned Sunday citing health reasons. The country's currency has plunged 30 percent this year. After the resignation of Berat Albayrak, Turkish lira gained 3% against $ following the resignation. (Photo by Burak Kara/Getty Images)

ISTANBUL — Turkey’s Central Bank announced its largest interest rate hike in two years Thursday, sending the Turkish lira soaring on expectations the nation’s new economic team will pursue more predictable monetary policies.

In a statement issued Thursday afternoon, the Central Bank’s Monetary Policy Committee decided to increase the one-week repo rate by 475 basis points from 10.25% to 15%, as forecasted by a Reuters poll. The committee also moved to end a multitude of complex backdoor tightening measures, opting instead to provide all funding through the main policy rate while pledging to fight the nation’s double-digit inflation.

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