ISTANBUL: Turkey's lira firmed on Friday to its strongest level in seven weeks, notching a weekly gain of some 12%, after President Tayyip Erdogan's pledge to adopt a new economic model raised expectations of a sharp rate hike from the central bank.

The lira hit 7.6150 to the dollar in morning trade, its firmest level since Sept. 25. It subsequently eased back to 7.6700 by 0825 GMT from Thursday's close of 7.6625. The currency's rally this week, after touching a record low of 8.58 last Friday, was sparked by expectations of a more orthodox economic policy after the central bank governor and the finance minister left office over the weekend.

The lira also firmed sharply against the euro this week, to as much as 8.9823 on Friday. Turkish locals' forex and gold holdings hit a record high of $224.23 billion on Nov. 6, indicating a rise of some $30 billion this year due to a lack of confidence in the lira.