Turkish lira extends further losses on inflation worries
ISTANBUL - Turkey's embattled lira currency extended recent losses on Monday after accelerating inflation stoked concerns about the emerging economy as Prime Minister Recep Tayyip Erdogan battles a political crisis.
By 1:00 pm (1100 GMT), the lira was down 0.13 percent against the dollar at 2.26 lira, and off 0.18 percent at 3.06 lira. The Istanbul stock exchange was up 0.07 percent at 61,900.22.
The Turkish statistics office (TUIK) said on Monday that consumer prices rose 1.72 percent in January, more than the market estimate of 1.61 percent, with annual inflation at 7.48 percent.
The lira has fallen by about 30 percent against the dollar and the euro since the start of 2013, including by around 10 percent since mid-December.
This is due to the US Federal Reserve reducing stimulus measures, hitting many emerging markets, but also to a political crisis in Turkey sparked by a corruption scandal in December.
The central bank responded last week by raising interest rates, including by more than doubling its pivotal one-week repo rate, but a rally in the lira soon fizzled out.
This set it on collision course with Erdogan, who warned that a rate rise would hit growth, and whose response to the graft scandal -- sacking hundreds of police and prosecutors -- has unsettled markets.
Erdogan, facing key local elections on March 30, said last week he was preparing to announce a package of new policies to boost the Turkish economy, for which many economists have cut their growth forecasts.