Turkish Lira Near All-Time Lows After Interest Rate Cut

The Turkish lira approached an all-time low on Friday as foreign investors flocked out, but bargain hunting in the local market limited losses, a day after the central bank’s unexpected decision to cut interest rates while providing a little indication of how far it could fall.

The lira, which has been subject to sharp volatility and a slowdown in emerging markets for several years, sank 1 percent to 8.855 against the dollar after European markets opened, near its June low of 8.880.

The lira also slumped on Thursday when the bank cut its key interest rate by 100 basis points to 18 percent despite rising inflation, providing the stimulus long sought by President Recep Tayyip Erdogan and bolstering analysts concerns about political interference.

The central bank gave few indications about the future course of monetary policy, but Societe Generale, Barclays, JP Morgan, and Goldman Sachs expected further rate cuts in the coming months.