Turkish Lira Falls After Interest Rate Hike

The Turkish lira dropped by up to 2.8% and recorded a new all-time low early this Friday morning, following an interest rate hike by the central bank yesterday. The lira was trading at 25.2015, approximately 1.3% weaker than yesterday's close. The Turkish central bank raised the key interest rate by 650 basis points to 15%. This move represents a shift in policy after years of monetary easing, during which the one-week repurchase agreement rate was lowered to 8.5% from 19% in 2021, a non-conventional approach maintained despite rising inflation.