Updated Jan. 28, 2014 7:01 p.m. ET
ISTANBUL—Turkey's central bank on Tuesday unveiled a series of aggressive interest rate increases, far exceeding market expectations and sending the lira roaring back after an extraordinary policy meeting billed as a test case for under-pressure emerging markets.
The bank raised its overnight lending rate to 12% from 7.75%, raised its one-week repo rate to 10% from 4.5% and raised its overnight borrowing rate to 8% from 3.5%. The overnight lending in the late liquidity window—the highest rate charged to Turkish banks if...