(Bloomberg) -- The lira advanced the most among major peers worldwide amid reports the central bank plans to narrow its interest-rate corridor, a move it said would be a long-anticipated step toward simplification of Turkish monetary policy.

The currency rose 2 percent to 4.6212 against the dollar as of 9:35 a.m. in Istanbul, poised for its first gain in three days. The central bank is planning to set up a symmetric and narrow interest rate corridor, Business HT reported governor Murat Cetinkaya as saying by sources it didn’t identify. The bank plans using the one-week repurchase rate as the main funding channel again, the news website reported.

If true, it would allow the “central bank to deliver a significant rate hike in the policy corridor,” Global Securities analysts including Sertan Kargin wrote in a note, referring to the news report. The move would help convince the market about the central bank’s “policy independence and its commitment to do more.”

The rebound comes as Cetinkaya and Deputy Prime Minister Mehmet Simsek plan to meet with investors in London on Monday and Tuesday. Their visit follows the worst week for the lira since the financial crisis. The volume of trades may be impacted by public holidays in the U.S. and U.K. markets on Monday.

Last week’s combination of a rising dollar, concern over the nation’s double-digit inflation and widening budget deficit, and President Recep Tayyip Erdogan’s plan to have more say in monetary policy spurred a flight from lira assets. Even the central bank’s unscheduled rate increase failed to support the currency for long.

The overnight borrowing, one-week repurchase and overnight lending rates are currently at 7.25 percent, 8 percent and 9.25 percent.

To contact the reporter on this story: Tugce Ozsoy in Istanbul at tozsoy1@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Dana El Baltaji, Tomoko Yamazaki

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