ANKARA (AFX) - The Turkish central bank said it has raised its key interest rate by 2.25 percentage points to 17.25 pct in an attempt to stabilise the country's currency, the lira, which has lost over 23 pct of its value since May,
This is the second interest rate hike in a month. On June 7, the central bank increased its key rate by 1.75 percentage points to 15 pct after annual inflation jumped to 9.86 pct in May, stoking concerns over the government's year-end target of 5 pct.
Turkish markets have been in turmoil since May as foreign investors grew nervous amid a global sell-off in emerging markets, political friction at home and higher-than-expected inflation figures.
On Friday, one US dollar bought 1.72 lira, compared with around 1.35 lira in May. The euro was trading at 2.14 lira, up from 1.65 at the beginning of May. The interest rate on the benchmark April 9, 2008 bond shot up to 21.03 pct from 19.52 pct on Thursday. The national index of the Istanbul stock exchange lost 3.2 pct to close the day at 33,132.3. newsdesk@afxnews.com afp/ak COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
This is the second interest rate hike in a month. On June 7, the central bank increased its key rate by 1.75 percentage points to 15 pct after annual inflation jumped to 9.86 pct in May, stoking concerns over the government's year-end target of 5 pct.
Turkish markets have been in turmoil since May as foreign investors grew nervous amid a global sell-off in emerging markets, political friction at home and higher-than-expected inflation figures.
On Friday, one US dollar bought 1.72 lira, compared with around 1.35 lira in May. The euro was trading at 2.14 lira, up from 1.65 at the beginning of May. The interest rate on the benchmark April 9, 2008 bond shot up to 21.03 pct from 19.52 pct on Thursday. The national index of the Istanbul stock exchange lost 3.2 pct to close the day at 33,132.3. newsdesk@afxnews.com afp/ak COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited