ISTANBUL, Dec 14 (Reuters) - Turkey’s central bank raised the highest of the four interest rates it uses to set policy by a less-than-expected 50 basis points on Thursday, making its first rate hike in eight months after inflation hit a 14-year peak last month.
The bank lifted its late liquidity window to 12.75 percent from 12.25 percent while leaving the benchmark repo rate at 8 percent.
The overnight lending rate was kept at 9.25 percent and the overnight borrowing rate at 7.25 percent.
Seventeen of 18 economists in a Reuters poll had forecast a late liquidity window rate hike, with eight predicting a rise of 100 basis points. Six economists forecast a 25-100 basis point hike in the overnight lending rate.
While the central bank fights inflation pressures, Turkish President Tayyip Erdogan makes frequent calls for cheaper credit to boost the economy. The bank’s resistance to lifting the repo rate has triggered concern among investors over the extent of its independence in the face of criticism from Erdogan. (Writing by Daren Butler; editing by John Stonestreet)