Turkey hikes key rate 500 points to 50% in surprise move

Turkey's central bank unexpectedly raised its key interest rate by 500 basis points to 50% on Thursday, citing a deteriorating inflation outlook and pledging to keep a tight stance until there is a significant and sustained drop in the trend. The bank has now raised its one-week repo rate by 4,150 basis points from 8.5% since last June, following President Tayyip Erdogan's victory in May elections and U-turn towards greater orthodoxy in economic policy. The central bank has recently taken other steps to tighten credit, including action on reserve requirements, prompting some banks to either reduce loan limits or even stop offering loans.