Turkish lira slips to new record low for 8th day straight

Turkish lira slips to new record low for 8th day straight

Turkey’s central bank said on Monday it would shut one of the last windows for lenders to access cheaper funding in its latest step to support the lira currency, which nonetheless slid for an eighth straight day to a new record low.

In response to what the bank said was another “decisive” step to maintain price and financial stability, the lira briefly rebounded before falling back to 8.4025 against the US dollar at 0809 GMT. Earlier, it touched 8.404.

The currency is the worst performer in emerging markets this year, down 29 percent on concerns over possible Western sanctions, depleted reserves, high inflation and monetary independence.

It has fallen 7 percent since the central bank held its key interest rate steady last month, bucking wide expectations for a policy tightening that investors and economists say is needed but that is politically unpopular in Ankara.

Underscoring the political pressure for looser monetary policy, President Tayyip Erdogan said on Saturday that Turkey is waging an economic war against “the devil’s triangle of interest and exchange rates and inflation”.

Yet Erdogan’s close ties with the White House may be upended if Joe Biden, the Democratic candidate and front-runner, wins the US presidential election on Tuesday.

Turkey could face sanctions from the United States over its Russian S-400 missiles, and from the European Union over disputes with Greece, Cyprus and France over maritime rights.

Sanctions could slow the economy’s recovery from a sharp contraction in the second quarter due to coronavirus restrictions. Last month, the manufacturing sector grew for a fifth straight month with sharp upticks in orders and output, a business survey showed on Monday.

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