ANKARA: Turkey's lira weakened nearly 0.8% on Tuesday to a new record low of 10.14 against the US dollar, weighed down by expectations of another unorthodox rate cut from the central bank this week.
The lira has shed 27% versus the dollar this year, mainly over concerns about political interference in monetary policy given President Tayyip Erdogan's frequent calls for lower rates and the rapid central bank leadership changes.
The bank is expected to cut its policy rate to 15% from 16% this week, according to a Reuters poll, though inflation remains near 20%. The lira depreciation - the worst in emerging markets - in turn stokes prices via imports.
Odile Renaud-Basso, president of the European Bank for Reconstruction and Development, told Reuters investors need to see a clear and credible policy framework in Turkey.
She had raised the issue of very high inflation with Erdogan during a visit last week, Renaud-Basso added.
The lira was also hit recently by the dollar firming after higher-than-expected inflation data in the United States.
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