Turkey’s lira weakens to record low above 2.53 against dollar

ISTANBUL-Reuters

DAILY NEWS Photo

The Turkish lira weakened to a record low above 2.53 against the dollar March 3, extending losses on the back of U.S. currency strength but with concerns about government pressure on the Central Bank to cut rates continuing to weigh on sentiment.

The lira peaked at 2.5312, exceeding a previous low of 2.5275 after data showed inflation remained well above the Central Bank’s target in February, limiting its room to make the deep rate cuts demanded by President Tayyip Erdoğan.

Seeking to boost flagging growth ahead of a June general election, Erdoğan has warned that defending high interest rates amounts to treason, ratcheting up pressure on the Central Bank and telling Governor Erdem Başçı to “shape up.”

Consumer prices rose 0.71 percent month-on-month in February, Turkish Statistics Institute (TÜİK) data showed today, just below a Reuters poll forecast of 0.75 percent. On an annual basis they rose to 7.55 percent from 7.24 percent in January.