The ailing lira of Turkey strengthened on Thursday as the central bank announced an interest rate increase that was much larger than anticipated and ended the unorthodox economics of President Recep Tayyip Erdogan.
Following a more subdued growth of 2.5 percentage points the previous month, the percentage rose to 25% from 17.5 percent.
The majority of economists had predicted that the ECB will increase its policy rate to 20% on Thursday.
The central bank declared that “monetary tightening will be further strengthened as much as necessary in a timely and gradual manner until a significant improvement in the inflation outlook is achieved.”
“We are determined!” Finance Minister Mehmet Simsek added in a social media post. “Price stability is our top priority.”
The lira gained as much as six percent against the dollar after Erdogan followed up the announcement by voicing strong confidence in his team.
“We are taking determined steps to address the problems caused by inflation,” Erdogan said in nationally televised remarks.
