Turkey’s central bank hiked its key interest rate by a surprisingly large 7.5 percentage points to 25% Thursday, signaling a new determination to address rebounding inflation as part of a broader policy U-turn. The poll, conducted last week, showed that interest rates were not expected to rise to 25% until the end of the year. The rate hike “sends a very strong signal that the [bank] is determined to rein in inflation and the initial market response is very positive,” said Piotr Matys, senior FX analyst at In Touch Capital Markets. Erdogan’s past drive to slash interest rates sparked a currency crisis in late 2021 and sent inflation above 85% last year. The currency is down about 68% in two years largely due to Erdogan’s previously outspoken opposition to high rates and influence over the central bank.

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Persons: Tayyip Erdogan, ”, Piotr Matys, “, Erdogan, ” Erdogan, Hafize Gaye Erkan, — Osman Cevdet Akcay, Fatih Karahan, — Organizations: Analysts, Touch, Wall Street