Turkish Lira hits record low against dollar on political worries, Fed’s rate hike signals

ISTANBUL

REUTERS photo

The Turkish Lira hit a record low against the dollar on Oct. 13 over fears that political uncertainty could be triggered by a fresh government move to push through legislation introducing an executive presidential system, as well as U.S. Federal Reserve (Fed) signals about a possible interest rate hike. 

Several voting Fed policymakers judged a rate hike would be warranted “relatively soon” if the U.S. economy continued to strengthen but doubts on inflation remained, according to the minutes of the Fed’s September policy meeting released on Oct. 12, creating additional pressure over the emerging currencies, including the Turkish Lira.

In Turkey, Prime Minister Binali Yıldırım signaled moves to shift to an executive presidential system, in a speech to members of his ruling Justice and Development Party (AKP) in Ankara. 

The lira weakened as far as 3.11 against the U.S. currency in the afternoon of Oct. 13 from around 3.09 early Oct. 13. 

It hit its previous record low on July 20, five days after a failed military coup attempt.