Turkey’s troubled lira fell to its lowest level since October on Thursday after its central bank scrapped a pledge to raise interest rates if needed.
The monetary tightening pause, now in its seventh month, is repelling investors already worried about double-digit inflation, unorthodox policy, political influence over the central bank’s independence, and dramatic yet unexplained moves in Turkey’s foreign currency reserves.
The lira was trading at 5.9502 to the dollar at 2:30 p.m. London time, and was down 1.5% at one point during the session. It is now down 7% on the greenback in the last month.
The Turkish central bank’s move has further shaken investor confidence in the country of 80 million, whose currency crash last year set off a run on emerging markets worldwide.
