Turkey’s president concedes a hated rate hike to save lira

Key official: Cetinkaya was one of the small group of top officials who had been laying the groundwork for a rate hike. — Bloomberg

ANKARA: Until the last moment, Turkey’s president was adamant. The lira’s downward spiral was just a bout of temporary volatility. There was no need for higher interest rates.

But three of Recep Tayyip Erdogan’s top officials had been working for days on a plan to stem the rout with an emergency hike. On Wednesday, as the currency’s slide accelerated, they put it into action, according to a person familiar with the process and won Erdogan’s support. That evening the central bank raised its late-liquidity rate by 300 basis points to 16.5%. The lira rebounded.