ISTANBUL: The Turkish lira continued its dive into uncharted territory on Thursday, touching a new low of 9.975 to the dollar after a jump in U.S. inflation exacerbated worries for a currency already hobbled by the central bank’s unorthodox rate cuts.
The lira was down as much as 1.2% intraday and near the psychological threshold of 10 versus the U.S. currency. It has shed two-thirds of its value in five years, eating into the incomes of Turks along with double-digit inflation.
At 1156 GMT, it had pared losses and one dollar was worth 9.88 Turkish lira. Turkey’s currency - the worst performer in emerging markets again this year - also neared a record intraday low versus the euro at 11.4386 before rebounding.
The higher-than-expected U.S. inflation data on Wednesday boosted the dollar due to possible earlier policy tightening by the Federal Reserve. Rising U.S. rates tend to pull funds from emerging economies with high foreign debt, like that of Turkey.
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