Turkish lira slides to record low of 8 against dollar

Turkey’s lira on Monday, October 26, set a new record low against the United States dollar after the central bank refused to raise its main interest rate and tensions increased sharply with the country’s Western allies.

The lira was at 8.03 against the dollar at around 0730 GMT, suffering a loss of nearly 1% since the start of the day.

The Turkish currency also recorded its lowest level against the euro, trading near 9.52.

The lira has lost 26% of its value against the dollar since the start of the year.

Turkey’s central bank last week upset the markets which had expected a 175 basis points hike to the one-week repo rate.

The bank opted instead to keep the rate unchanged at 10.25% despite market concerns over persistently high inflation, which remains in double digits, and worries about a sharp drop in foreign currency reserves.

Consumer price inflation was 11.75% in September.

The bank’s governor will deliver the quarterly inflation report on Wednesday, October 28, in Istanbul.

The lira’s decline comes at a time of strained relations with NATO allies including France, Greece, and the United States over multiple issues.

Turkish President Recep Tayyip Erdogan angered Paris after he said his French counterpart Emmanuel Macron needed to have “mental checks” at the weekend.

France responded by recalling its ambassador to Ankara and on Saturday, October 24, described Erdogan’s comments as “unacceptable.” – Rappler.com