Turkey’s lira drops to record low after US jobs data

ISTANBUL-Reuters

REUTERS Photo

The Turkish lira sank to yet another all-time low Feb. 9, a fresh historic low of 2.4950 against the dollar, hit by expectations the U.S. Federal Reserve could raise interest rates mid-year, bolstering the dollar and reducing appetite for riskier emerging-market assets.

The currency has hit record lows for weeks as government officials, including President Recep Tayyip Erdoğan, make repeated calls for the Central Bank to cut Turkish interest rates.

“Any easing in the policy stance looks less probable. The tightening in liquidity conditions will likely put additional pressure on the Turkish Central Bank to keep money-market rates close to the upper band of the interest-rate corridor for longer,” TEB-BNP Paribas strategist, Erkin Işık, wrote in a research note.

The main Istanbul share index fell 1.53 percent to 83,690.86. The two-year bond yield traded at 7.8 percent, up from 7.43 percent on Feb. 6.