Inside the Turkish central bank officials held an emergency policy meeting at midnight.
They decided to raise the country's overnight lending rate from 7.75 percent to 12 per cent.
The move's to help stabilize the value of the lira, which has recently plunged amid ongoing turmoil across emerging markets.
The overnight borrowing rate was also increased from 3.5% to 8 per cent.
The lira immediately strengthened against the dollar after the central bank announcement.
The Turkish bank governor said the hike is to combat inflation.
(SOUNDBITE) (Turkish) TURKISH CENTRAL BANK GOVERNOR, ERDEM BASCI, SAYING:
"Since 2002, it has been our primary mission to further the success we achieved in our struggle against inflation. In this direction, nobody should hesitate that the central bank will use all its instruments effectively to control inflation and to attain 5 percent inflation target."
But the Turkish central bank has been accused of being slow t