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Turkey’s lira slides as Central Bank raises inflation forecast

Despite state bank efforts to bolster Turkey’s currency, the lira fell to its lowest point since May against the dollar this week, prompting fears of a renewed currency crisis.
Turkish Prime Minister Tayyip Erdogan displays an banknote of the old Turkish Lira at a news conference in Ankara October 3, 2008. Turkey will return to its old currency, the Turkish Lira, on January 1, after a major money reform four years ago that saw the introduction of the New Turkish Lira. The banner in the background reads "The Turkish lira is coming". AFP PHOTO/ADEM ALTAN (Photo credit should read ADEM ALTAN/AFP via Getty Images)

ISTANBUL — Following two months of stability brought about by heavy state bank spending, the Turkish lira is volatile once more, falling to about seven per US dollar and hitting record lows against the euro this week.

The slide came as state banks sold at least $2.5 billion Monday and Tuesday to prop up the currency as demand for foreign currency widened the nation’s current-account deficit, according to reports by Bloomberg News.

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