On Sept. 24, the Central Bank of the Republic of Turkey (CBRT) announced a surprise interest rate hike in a preemptive move that seeks to prevent the country’s depreciating currency from unfolding into a larger banking or balance of payments and external debt crisis. The steadily declining value of Turkey’s national currency, the lira, is largely the result of economic imbalances — partially precipitated by a highly negative real interest rate, a credit-fueled construction boom, and large external financing needs, as well as the CBRT’s lack of credibility and near exhaustion of Ankara’s foreign currency reserves. The lira hit historic lows against both the dollar and euro on Sept. 23, depreciating nearly 15 percent and more than 21 percent, respectively, since late May. Turkey is in its second currency crisis in a little more than two years.