Turkish central bank raises key rate to 50%

Turkey's central bank said on Thursday it would raise its key interest rate by 5 percentage points to 50 percent, citing climbing inflation as a reason.

The bank kept its rate unchanged in February, although it had been raised for eight straight months till then.

It says it decided to up the rate amid inflationary pressure, and that monetary tightening will be maintained until a cooling down of the underlying inflation trend is seen.

The annual inflation rate rose to 67.07 percent last month, indicating that rate hikes were not catching up.

The Turkish lira has continued to slump against the dollar. It lost half its value in the past two years. And the chronic inflation and weakening currency are plaguing the population.

Turkey is preparing for local elections to be held late this month, and the central bank apparently moved to stabilize the country's economy.

Now the focus is on whether continued monetary tightening can calm things down.