ISTANBUL: Turkey’s lira hit a record low of 18.75 against the dollar on Monday, bringing its losses this year to nearly 30%, edging lower after a period in which Ankara has followed policies tightly controlling the exchange rate.

At 0518 GMT, the lira was 0.35% weaker than Friday’s close of 18.6850. It shed 44% of its value in 2021, mainly as a result of unorthodox rate cuts as inflation rose.

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.

Turkish lira weakens to record low of 18.7 against dollar

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%.