Record Decline of The Turkish Lira After The Interest Rate Cut

The Turkish lira hit a record low against the dollar on Friday, a day after the central bank announced another interest rate cut as part of President Recep Tayyip Erdogan’s economic program.

The lira was down 2 percent at 16 per dollar, compared to its close of 15.675 on Thursday. The dollar has more than doubled in value this year against the lira, disrupting the large emerging market economy.

The central bank cut the interest rate by 100 basis points, in line with expectations, bringing the rate of cut that began in September to 500 points, which reduces the attractiveness of the currency to investors and depositors.

The bank has hinted that it will pause the rate cut to monitor its effects in the next three months.

The central bank is facing pressure from Erdogan to cut interest rates in order to boost economic growth.