Turkish central bank announces tough monetary action

The Turkish central bank announced on Monday that it was applying immediately a "strong" tightening of monetary conditions after the local currency hit a record low level against the dollar.

"A strong extra monetary tightening will start as of today," the bank's governor Erdem Basci said in a statement.

"It's essential that the extra monetary tightening is strong, effective and temporary," he said.

Basci added that the duration of the tough policy would depend on developments on the foreign exchange market.

The Turkish economy grew by 2.2 percent in 2012, short of the government forecast of 3.2 percent expansion.

This was a major slowdown from 2010 and 2011 when Turkish GDP jumped ahead by 8.9 percent and 8.8 percent respectively, drawing fears of overheating.