Turkish Lira Weakens to Record Low Ahead of Rates Meeting

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Turkish Lira Weakens to Record Low Ahead of Rates Meeting
Credit: © Reuters.

(Bloomberg) -- Turkey’s lira tumbled to a record low ahead of the central bank’s rates meeting later on Thursday, with some analysts expecting another cut following August’s surprise reduction. 

The currency fell as much as 0.2% to as low as 18.3737 per US dollar as of 10:16 a.m. in Istanbul, the lowest level on record. 

Turkey’s unconventional monetary policy has left it with the world’s most negative interest rates when adjusted for inflation, which surpassed 80% last month. The central bank reduced the benchmark one-week repo rate by 100 basis points to 13% on Aug. 18, a move expected by none of the 21 analysts in a Bloomberg survey. The Federal Reserve’s 75 basis points hike on Wednesday increased the pressure.

The central bank’s rate-setting committee will announce its decision at 2 p.m. on Thursday. Five of the 22 analysts surveyed by Bloomberg expect a cut of as much as 100 basis points, while the rest foresee no change.

The lira weakened 27.6% this year, the second-worst performing emerging-market currency after the Argentine peso

 

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