ANKARA: Turkey's central bank on Thursday aggressively raised its main interest rate after a major economic team shake-up that included President Recep Tayyip Erdogan's son-in-law giving up his finance ministry brief.

The bank said the one-week repo auction rate would go to 15 percent from 10.25 percent and that it was eliminating all other lending facilities to make its policy decisions more "transparent".

The Turkish lira rose two percent in value against the dollar moments after the announcement before paring back some of its gains.

"The Central Bank will attain its main objective of achieving and maintaining price stability by adopting transparency, predictability and accountability principles of the inflation targeting regime," the bank said in a statement.

The hike was in line with market expectations but the shift to a single funding mechanism - thus eliminating the much-criticised practice of raising the main rate through stealth and unpredictable means - pleasantly surprised some economists.-AFP