Turkish lira nears record lows as emerging markets struggle
Turkish stocks slid and the lira hit a six-month low against major currencies Thursday as higher-than-expected US inflation data weighed on emerging markets.
ISTANBUL – A rolling decline in Turkey’s lira accelerated Thursday as the currency slid to a six-month low after US inflation data put pressure on most emerging markets.
The lira fell about 0.8% Thursday, briefly surpassing 8.5 to the dollar, just shy of its 8.58 record low in November. The news weighed on Turkish markets, which were closed for the Muslim holiday of Eid al-Fitr, and Turkish stocks appeared headed for their worst day since late March due to an offshore selloff.
With low foreign exchange reserves and a Central Bank hesitant to tighten monetary policy amid double-digit inflation, Turkey’s economy remains highly vulnerable to global market trends.
The latest tremor comes after US consumer prices jumped to 4.2% Wednesday, up from 2.6% in March, its steepest rise since 2008. The figures raised expectations the US Federal Reserve will tighten its monetary policy sooner than expected, sending most emerging market currencies down Thursday, with the Turkish lira leading the cohort.
