The Turkish lira is rising in response to the central bank’s decision to keep interest rates unchanged at 14% on Thursday (Jan. 20).
The lira recovered to 13.35 against the dollar.
Turkey’s central bank has kept its key interest rate unchanged at 14%. Last year, the Turkish president had cut interest rates several times, triggering the lira crisis. As a result, inflation rose to 36%, the highest level in 19 years.
The central bank said it would keep an eye on the effects of recent monetary policy measures and continue to reduce inflation to maintain financial stability.
The lira plunged 44% last year, making it the worst-performing emerging market currency. After several central bank governors had previously been dismissed, there were sell-offs by foreign investors who doubted the central bank’s independence.