ANKARA, May 23 (Xinhua) -- The Turkish Central Bank on Wednesday announced to raise interest rates by 300 basis points as part of effort to stem Turkish lira's decline.

In an emergency meeting of Monetary Policy Committee late on Wednesday, the Central Bank sharply increased the late liquidity window lending rate to 16.5 percent from 13.5 percent.

"The committee decided to implement a strong monetary tightening to support price stability," the bank said in a statement, adding "the Central Bank will continue to use all available instruments in pursuit of the price stability objective."

The long-awaited move prompted a sharp rally in the lira to 4.57 against U.S. dollar after it earlier tumbled five percent during the day.

Earlier Wednesday, Turkish lira exchange rate against the U.S. dollar hit a historic low, falling to 4.93.

The lira has fallen some 20 percent so far this year and touched a series of record lows.

"It was high time to restore monetary policy credibility and regain investor confidence," Deputy Prime Minister Mehmet Simsek said on Twitter, shortly after the Central Bank's decision.

"None of Turkey's macroeconomic problems are insurmountable," he said. "We have fixed problems in the past, we can do it again."

The last time the Central Bank raised interest rates at an emergency meeting was in January 2014, in an attempt to stop a similar sell-off in the lira. Since then, the currency has lost more than half its value against the dollar.