Dollar and euro drop against lira by over 5% after hawkish rate hike in Turkey
The dollar and euro on Thursday slumped against the Turkish local currency after the surprising hawkish policy interest rate hike by Turkey's Central Bank.
The central bank raised its key interest rate by a larger-than-expected 750 basis points to 25% today, sparking a rare lira rally. The dollar was trading at 27.82 lira late Thursday, after it closed at 29.58 the previous day, with a drop of 5.5%.
The euro was trading at 27.84 lira, down from 29.58, with a similar decline of 5.9%.
The bank index XNANK in Borsa Istanbul was positively impacted by the rate jump, rising from 6.872 points to as high as 7.485 in the day.