ANKARA: Turkey’s lira weakened to a fresh record low of 18.7 against the dollar on Friday, extending its losses this year beyond 29%, even as Ankara pushes on with policies to tightly control the lira’s foreign exchange rate.

The lira shed 44% in 2021, mainly as a result of a series of unorthodox rate cuts even as inflation was rising.

The currency has become less reactive to policy decisions due to a scheme that protects lira deposits against forex depreciation, Ankara’s indirect foreign exchange sales to the market, and a heavy hand in directing credit in the economy.

Turkey’s central bank holds rate at 9% after four months of cuts

The lira has remained relatively stable since August despite another easing cycle this year that saw the policy rate reduced by 500 basis points to 9% despite inflation near 85%.