The Turkish Lira Plunges to a New Low Due to Inflation Fears

The Turkish lira plunged to a new record low against the dollar on Thursday after higher-than-expected US inflation data exacerbated concerns about a currency already battered by central bank monetary policy.

The lira settled at 9.9050 against the dollar, after falling to 9.91 dollars and down 0.6 percent from the previous session’s closing. The Turkish currency has lost about 25 percent of its value this year.

Inflation data in the US gave a boost to the dollar as investors weighed the possibility that the Federal Reserve (the US central bank) would tighten monetary policies earlier than expected.

High US interest rates usually attract money from emerging economies with high external debt such as Turkey.