STORY CONTINUES BELOW THESE SALTWIRE VIDEOSBy Ali Kucukgocmen and Jonathan Spicer
The policy committee - including three members taking part for the first time and seen as having hawkish sway - repeated it would tighten"as much as needed in a timely and gradual manner" to cool inflation, which soared to nearly 48% last month. Turkish bank stocks rallied nearly 10%, lifting the broader Istanbul bourse, while the government's dollar-denominated bonds jumped more than 2 cents according to Tradeweb data.
The rate hike"sends a very strong signal that the 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 rates sparked a currency crisis in late 2021 and sent inflation above 85% last year. Annual consumer prices are seen rising to around 60% by year end due partly to currency depreciation.