Turkish lira hits new record low

The Turkish lira weakened more than 2 per cent to a new record low against the dollar on Tuesday over concerns that the central bank might raise interest rates this week by less than previously expected.

The lira hit a record low of 26.9 against the US currency, sliding from Monday’s close of 26.3505. It has weakened by 30 per cent so far this year.

According to a Reuters poll, Turkey’s central bank is expected to raise its policy rate by 500 basis points to 20 per cent this week, making good on its pledge of further tightening to curb inflation, which is set to rise again.

The central bank will announce its rate decision at 1100 GMT on Thursday.

“News saying that the central bank’s interest rate hike will be below market expectations is triggering the lira depreciation,” said one trader.

On Tuesday, the Euro surpassed the 30TL mark selling for 30.30TL. The Pound sold for 35.50TL and the Dollar traded at 26.90TL.