The lira reversed earlier gains after a doubling of interest rates failed to assuage concern that Turkey's economy will be left exposed by a slowdown in China and a reduction in U.S. monetary stimulus. Stocks fell.

Turkey's central bank raised all its main interest rates at an emergency late-night meeting in an effort to shore up the lira, resisting government pressure and reversing years of policy aimed at stoking growth.The Ankara-based bank increased the one-week repo rate to 10 percent from 4.5 percent, the overnight lending rate to 12 percent from 7.75 percent, and the overnight borrowing rate to 8 percent from 3.5 percent.

The central bank said the one-week repo rate, now at 10 percent, should be treated as the benchmark policy tool. Since it had previously been encouraging investors to use the overnight lending rate as the main guideline, the move amounts to an effective tightening of between 200 and 400 basis points, said Neil Shearing, the chief emerging-markets economist at Capital Economics Ltd. in London.