Turkish lira falls below record 2.1 against dollar under political pressure
The Turkish Lira weakened below 2.1 against the dollar, hitting a fresh record low today under the ongoing political pressure Hurriyet Daily News reproted.
Turkish financial markets have continued to slump on a second consecutive day, despite a promise from the Central Bank to support the lira. The fall comes after the resignation of three Turkish ministers, one of whom called for Prime Minister Recep Tayyip Erdogan to step down, and a wide cabinet reshuffle.
The lira plummeted down to a record low of 2.1035 against the U.S. dollar after starting the day at 2.0914.
The currency, which has been going through a shaky period for some time, was traded at $2.0974 as of 12.32 a.m.
Turkey's main stock index, BIST 100, also continued falling, with a 1.8 percent drop to 64,904 points.
The index plunged by 4.2 percent to 66,096.57, adding to heavy losses from last week.
The central bank on Dec. 24 had made its most clear commitment yet to ramping up its support of the lira, promising to sell at least $6 billion in foreign currency by the end of January.
Already under pressure this year in anticipation of the U.S. Federal Reserve's decision this month to stem a flood of dollars that has boosted global emerging markets, the lira has been beaten down further by the row around the corruption probe.
Analysts say it does not have the currency reserves to defend the lira aggressively for long. Turkey needs to import almost all of the oil it uses, which gives it one of the world's largest current-account shortfalls and makes it heavily dependent on foreigners buying its stocks and bonds to bring in capital.