ISTANBUL: The Turkish lira weakened to 17.579 against the dollar on Tuesday, as the strong US unit and concerns over high domestic inflation and low interest rates dragged the currency to its weakest level since a full-blown currency crisis in December.
Since the historic crash last year, the central bank has used its foreign exchange reserves to stabilise the lira, which is still down about 25% on the year after shedding 44% in 2021 to become the worst performer among emerging markets (EM).
Unorthodox rate cuts late last year sparked the crisis that sent inflation soaring to nearly 80% in June.
“A lot of investors are fed up with Turkey because this is a country that is pursuing the polar opposite of what needs to be done in terms of macroeconomic policy,” said Nafez Zouk, EM sovereign debt analyst at Aviva Investors.
In recent months since the crisis, the government and central bank have ramped up measures to reverse the tumbling foreign-exchange rate.
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