The lira currency appreciated 4.3% against the U.S. dollar to TRY6.0826 Thursday.

However, some analysts believe that further interest rate hikes may be needed to fully rein in inflation, which is expected to further accelerate given the lira’s 40% devaluation against the USD this year. Turkey’s inflation surged to 18% in August as the weakness in the lira pressured the prices on a number of goods and imports.

The central bank, though, will be walking a very precarious tightrope act as it tries to balance rate hikes with inflation as a much higher rate would pressure Turkish economic growth. Turkey’s economy expanded 5.2% in the second quarter but is expected to slow and potentially contract in the second half of the year.

“Today’s move is a decisive step in the right direction. But we need to see if they keep this tightening until inflation starts to cool,” Diana Amoa, emerging-markets portfolio manager at JPMorgan Asset Management, told the WSJ. “For Turkey, it’s still a fight for its lost credibility.”

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