ISTANBUL — Turkey’s central bank surprised financial markets on Thursday with its first interest rate hike in almost two years in a bid to rescue the spiraling lira currency and rein in inflation, defying President Recep Tayyip Erdogan, an outspoken critic of higher rates.
Policy-makers lifted the benchmark one-week repo rate by two percentage points to 10.25% after the lira hit yet another record low against the dollar earlier in the day. The currency has lost a fifth of its value this year amid fears that Erdogan’s quest for growth at all costs could unleash economic havoc.
