ISTANBUL: The Turkish lira rallied nearly 2% against the dollar on Tuesday after hitting its weakest since mid-December a day earlier, rebounding as expectations grow that the central bank could lift its key interest rate from 17% next week.

The lira strengthened as far as 7.60 against the US currency from a close of 7.7440 Monday, and stood at 7.6300 at 1150 GMT. In the previous session it hit 7.7840, the weakest since Dec. 17 after a two-week slide. The lira had gained some 20% since early November but gave back half of those gains in the past two weeks.