The Turkish lira is rallying after its central bank hiked rates to 17.75%

AP Photo/Kayhan Ozer Presidential Press Service, via AP Pool

Turkey President Recep Tayyip Erdogan gives a speech commemorating those killed and wounded during a failed July 15 military coup, in Ankara, Turkey, Friday, July 29, 2016.

• The Turkish lira was up more than 2% on Thursday.
• That's after Turkey's central bank raised rates more than expected.
• Follow the lira in real time here.

The Turkish lira rose against the dollar Thursday after the country's central bank hiked rates more than expected to 17.75%.

The lira was up more than 2% against the greenback at 8:15 a.m. ET as Turkey's central bank raised its policy rate 125 basis points. Economists had predicted a rise between 50 and 100 basis points, according to Reuters.

The policy meeting comes after data showed consumer prices hit a six-month high in May, rising more than 12%.

Turkey's central bank has been aggressively trying to prop up the lira, which is down nearly 18% versus the dollar this year. Officials conducted an emergency policy meeting last month amid a selloff, hiking rates by 300 basis points.

That's after Turkish President Recep Tayyip Erdogan told Bloomberg TV that if he wins an election scheduled for later this month, he will step up his role in shaping economic policy. The comment raised concerns about how much influence Erdogan, a self-declared "enemy" of interest rates, will have on the country's central bank.

Last month, the lira hit a record low of 4.9233 per dollar.

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