Turkey hikes key interest rate to support currency

Turkey raises overnight lending interest rate to support national currency

Associated Press

ANKARA, Turkey (AP) -- Turkey's central bank has raised its key interest rate by 0.75 percentage points in a bid to stump the Turkish lira's fall against the dollar.

The central bank on Tuesday raised the overnight lending rate to 7.25 percent from 6.50 percent.

The move comes as the bank tries to stop the lira from falling too sharply against the dollar in the wake of anti-government protests in Turkey in June. The lira is also being hurt as investors pull out of emerging markets on expectations the Federal Reserve will rein in its support for the U.S. economy. The support was providing investors with cheap money to invest in countries like Turkey that promised high returns.

The Turkish lira strengthened after the announcement, to 1.9081 lira per dollar from 1.9153 lira. 

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