Turkish Lira Hits New All-Time Low Against the Dollar

The Turkish lira plunged to a new all-time low against the US dollar on Monday, with analysts seeing little chance for recovery given what they described as "unwise" interest rate cuts expected later this week. The Turkish currency, the worst performer among emerging market currencies this year, touched its lowest level ever at 9.35 to the dollar before closing at 9.34 to the dollar. The lira has lost 20 percent of its value this year, with half of that drop occurring since the beginning of last month when the Turkish central bank started signaling easing policies despite inflation rising to around 20 percent. Turkish President Recep Tayyip Erdoğan has repeatedly urged the central bank to ease monetary policy, and analysts believe his intervention has undermined the credibility of monetary policy in recent years. A surprise cut of 100 basis points last month led to a sharp decline of the lira, according to Reuters. Economists surveyed by Reuters were divided on the expected size of the interest rate cut at the monetary policy committee meeting on Thursday, with some predicting a reduction of 50 basis points while others expected a cut of 100 basis points.