Turkish lira drops 1% on renewed concerns about inflation and monetary policy

The Turkish lira fell again on Wednesday, continuing losses for the seventh day, due to the rise of the dollar and investors’ fears of rising inflation and the policies applied to deal with the economic crises in the country.

The lira fell one percent against the dollar to record 17.2 by 0807 GMT, continuing to reduce the gains recorded last Monday, when it reached 16.03 against the dollar.

The lira has lost 23 percent of its value this year, adding to a 44 percent loss last year caused by a series of interest rate cuts by the central bank encouraged by President Recep Tayyip Erdogan, despite inflation rising to near 79 percent in June.

High energy prices undermined the government’s goal of controlling the chronic current account deficit and creating a surplus.

According to a Reuters poll, the deficit this year is expected to exceed $40 billion.