The lira sank to a record low after Turkey’s central bank unexpectedly held back from raising its key interest rate, Bloomberg reports.

Traders had been holding out for a fresh increase on Thursday, October 22 after policy makers hiked rates at their previous meeting. The currency’s slump of more than 2% -- the biggest decline in emerging markets -- underscored their disappointment as the lira weakened toward 8 per dollar.

The Monetary Policy Committee left its key one-week repo rate at 10.25%, a decision forecast by just two of 27 respondents in a Bloomberg survey. At the same time, it raised the upper bound of its interest-rate corridor to 14.75% from 13.25% and doubled the gap with the central bank’s overnight lending rate to 300 basis points.

Widening the rates corridor is “a smoke and mirrors trick that is worse than useless if the central bank wants to have an ounce of inflation fighting credibility,” said Nigel Rendell, an analyst at Medley Global Advisors in London.