STORY: Turkish lira dips after central bank hikes interest
DATELINE: June 23, 2023
LENGTH: 00:01:30
LOCATION: ISTANBUL, Türkiye
CATEGORY: ECONOMY

SHOTLIST:
1. various of Istanbul city in Türkiye
2. various of an exchange office in Istanbul, Türkiye
3. various of the Istanbul Stock Exchange in Türkiye
4. various of Türkiye's central bank
5. various of Hafize Gaye Erkan, governor of Türkiye's central bank (courtesy of Ihlas news agency)
6. various of Turkish President Recep Tayyip Erdogan in Ankara, Türkiye (file)
7. various of Turkish Finance Minister Mehmet Simsek in Ankara, Türkiye (file)

STORYLINE:

Turkish currency on Thursday hit an all-time low against the U.S. dollar after the central bank hiked the interest rate well below market expectations.

The lira hit 24.49 against the greenback on Thursday afternoon after the rate decision, dropping further from Wednesday's rate of 23.55. The currency's depreciation against the greenback has exceeded 20 percent since the beginning of the year.

Meanwhile, Türkiye's benchmark BIST-100 Index at the Istanbul Stock Exchange surged to 5,285 points with an increase of 1.90 percent as of 2:23 p.m. local time (1123 GMT).

Türkiye's central bank, led by its new governor Hafize Gaye Erkan raised the interest rate from 8.5 percent to 15 percent, the first such hike in 27 months.

The bank also signaled that the monetary tightening would continue "in a timely and gradual manner until a significant improvement in the inflation outlook is achieved."

Investors expected a more aggressive monetary tightening.

The rate hike marks a return to more orthodox monetary policies, although President Recep Tayyip Erdogan defends lower rates to stimulate growth. But Erdogan said he accepted his new team's steps to address the country's economic crisis.

Türkiye's newly appointed Finance Minister Mehmet Simsek promised to return to the rational ground early this month to combat high inflation.

Xinhua News Agency correspondents reporting from Istanbul, Türkiye.
(XHTV)