Turkey’s central bank left is benchmark interest rate unchanged Tuesday, surprising investors and sending the lira falling.

The Monetary Policy Committee in Ankara left its benchmark one-week repo rate at 8%. The central bank increased the overnight lending rate to 9.25% from 8.5% and held overnight borrowing rate at 7.25%.

In addition, the central bank raised the late liquidity window overnight lending rate to 11% from 10%. This is the rate the national lender charges Turkish banks if they need to borrow just before local markets close.

Turkey’s lira extended earlier losses against the dollar to trade 1% lower at 3.8, having weakened to as low as 3.8289 following the decision. The main BIST 100 stock index was up 0.02%, while the benchmark two-year government bond yield dropped to 11.19% from 11.27% earlier Tuesday.

Source: marketwatch.com