Turkish central bank unexpectedly hikes rates

Turkey´s central bank hiked its main policy rates by more than was expected in a bid to defend its currency which was trading at multi-year lows versus the US dollar.

The monetary authority in Ankara unexpectedly increased the country´s overnight lending rate from 8.25% to 8.50%, versus forecasts for no change.

In parallel, the repurchase rate was lifted from 7.5% to 8.0% (consensus: 7.75%).

The overnight borrowing rate was kept at 7.25%, as expected.

As of 1203 GMT the US dollar was down by 0.07% to 3.3928 against the Turkis lira, having hit 3.3711 immediately following the announcement.