Turkish lira hits new depths

Turkish lira hits new depths

Turkey's lira weakened 1.3% on Tuesday to a new record low of 10.22 against the dollar, weighed down by expectations of another interest rate cut by a central bank.

The lira has shed 27% this year, the worst performer in emerging markets, mainly over investor concerns about President Tayyip Erdogan's influence on monetary policy and what many call a premature and risky easing cycle.

The central bank is expected to cut its key rate to 15% from 16% this week, according to a Reuters poll, though inflation remains near 20%.

The bank has said inflation pressure is temporary and has slashed rates by 300 basis points since September. That was when the lira selloff gained steam and, in turn, stoked prices via Turkey's heavy imports.

The lira has also been hit over the last week by the dollar firming after higher-than-expected U.S. inflation data, Reuters reported.

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Vestnik Kavkaza

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