Turkish central bank hikes key rate to boost lira

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Associated Press

Posted on January 28, 2014 at 4:01 PM

ANKARA, Turkey (AP) — Turkey's central bank has raised its key interest rate to 12 percent from 7.75 percent to try to stave off inflation and support the national currency, which has fallen sharply in recent weeks.

The decision was taken Tuesday at an emergency meeting the central bank called for after the currency, the lira, hit a record low.

The lira has been dropping amid concerns that a bribery scandal might destabilize the government. Like currencies in other emerging markets, the lira has also been battered by concerns over a slowdown in global growth and the potential impact of the withdrawal of the Federal Reserve's stimulus in the United States.

A higher interest rate is intended to draw investor money into Turkey, which could boost the lira's value.

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