Turkey's central bank raised its benchmark interest rate by 50 basis points on Thursday, the first increase in nearly three years, as a surging U.S. dollar and domestic security worries batter the lira currency and stoke inflation fears.
Defying President Tayyip Erdogan's repeated calls for cheaper credit, the bank increased the one-week repo rate to 8 percent. It also lifted it overnight lending rate to 8.5 percent, from 8.25 percent.
Twelve out of 19 economists polled by Reuters had expected an increase of 25 basis points in the repo rate, although the bank was widely expected to stay put on the overnight lending rate. It marks the first policy tightening since January 2014.