Rate hike of 750 bps vs forecast of 250 bps
Rare hawkish surprise leads to rare lira jump
Analysts see stronger determination on inflation
Policy committee included three new members

ISTANBUL, Aug 24 Reuters Turkey39;s central bank hiked its key interest rate by a largerthanexpected 750 basis points to 25 on Thursday, sparking a rare lira rally and signalling a new determination to address rebounding inflation as part of a broader policy Uturn.

The surprise move leaves the policy rate at its highest level since 2019, and sent the Turkish currency to its strongest level since midJuly. The bank has raised its oneweek repo rate by 1,650 basis points since June.

The policy committee including three members taking part for the first time and seen as having hawkish sway repeated it would tighten as much as needed in a timely and gradual manner to cool inflation, which soared to nearly 48 last month.

Analysts said the move was the clearest step yet toward more orthodox policies after years of unorthodoxy under President Tayyip Erdogan, and should help rein in inflation expectations.

The lira had touched new alltime lows almost daily in recent weeks, including in the minutes before the policy decision. But it jumped more than 3 versus the dollar afterward and was at 26.41 at 1205 GMT.

Turkish bank stocks rallied nearly 10, lifting the broader Istanbul bourse, while the government39;s dollardenominated bonds jumped more than 2 cents according to Tradeweb data….