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Turkey’s lira tumbles as inflation nears record high

Investors are dumping the Turkish currency amid worries that a pre-election spending spree and pressure on the Central Bank to keep interest rates low could see the lira continue to spiral.

Turkish currency traders huddled in a tiny back street outside Istanbul’s Grand Bazaar on Thursday, seeking euros and dollars. The lira has sunk to a new record low after the government said inflation is running higher than expected. Three dozen men with walkie-talkies and cellphones barked out orders at the open-outcry exchange at Tahtakale, an informal currency market located outside the 15th century bazaar that is the symbolic heart of Turkey’s financial world.

The lira has taken a battering this year, losing about 10% of its value amid worries the country’s impressive growth rates are fueled by unsustainable stimulus spending and onerous borrowing, overheating the economy.

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