Turkey’s latest massive interest rate hike has caught the attention of long-sceptical foreign investors who say they could return to Turkish assets if authorities continue to demonstrate that a return to orthodox monetary policy is underway.
The lira rallied as much as 7% on Thursday after the central bank shocked the market by lifting its key rate by 750 basis points to 25% – three times the size of the expected move.
Turkey’s top officials say that they plan to take two more vital steps to reverse a years-long exodus of foreign investment as well: they will publish a comprehensive economic programme next month that will reduce uncertainties; and they will begin holding meetings with investors abroad.
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