The iShares MSCI Turkey ETF (NasdaqGM: TUR) is up more than 4% this month, but that barely dents the exchange traded fund’s year-to-date loss of more than 48%. Clearly, the only US-listed ETF focusing on controversial Turkish stocks has a lot of work ahead of it.

The same is true of Turkey’s economy, which is grappling with the effects of a slumping currency and rampant inflation. Earlier this month, the central bank there boosted interest rates by 625 basis points to 24%.

“This rate increase was a welcome and necessary first step towards exiting the ongoing Turkish lira crisis,” said Markit in a recent note. “The immediate market reaction was one of relief, with bond spreads narrowing and the lira rallying against the US dollar and the euro. The degree to which the TCMB increased the repo rate was a positive surprise, a more aggressive action to get in front of annual inflation than IHS Markit and many observers had anticipated.”

Turkey faced heavy pressure to raise rates as the lira has spiraled downward by more than 40% against the U.S. dollar. However, the latest efforts by the central bank appear to be steadying its value for the time being.

Lingering Concerns

Although Turkey’s recent interest rate hike is substantial, more steps are needed to get the economy there on firmer footing and regain investors’ confidence.

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