Turkish Central Bank hikes interest rates

By Muhammed Ali Gurtas

ANKARA (AA) - The Turkish Central Bank on Wednesday announced an increase of late liquidity window interest rates by three percentage points.

According to the statement issued by the bank, the late liquidity window interest rates -- between 4 p.m. and 5 p.m. (between 1300 and 1400GMT) -- were changed.

The borrowing rate was kept at 0 percent while the lending rate was increased from 13.50 to 16.50 percent.

The bank's move came after the U.S. dollar/Turkish lira exchange rate hit a historic high on Wednesday, climbing to around 4.93. Following the bank's decision, the dollar/lira rate fell steeply to below 4.60.

In the beginning of the year, the USD/TRY rate was 3.78 while the average rate was 3.65 last year.

The bank's Monetary Policy Committee meeting on Wednesday was held urgently. According to the bank's schedule, the next meeting is to be held on June 7.

The Central Bank kept its policy rate -- the one-week repo rate -- constant at 8 percent while the marginal funding and overnight borrowing rates were kept constant at 9.25 and 7.25 percent, respectively.