Turkish currency plunges to record low level to US dollar
ANKARA - The Turkish lira fell to a record low level early on Tuesday on signals of a tightening of US monetary policy which have hit emerging market currencies hard.
The lira plunged to 2.0095 to the dollar in initial trading, rallying later to 2.0028 from 1.9920 at the close on Monday when the central bank sold $350 million in defence of the lira.
The main Turkish stock market fell by 1.66 percent in morning trading.
The fall of the lira under pressure from US monetary policy, as well as weaknesses in the Turkish economy, had reached a new stage on Friday when the currency went past two to the dollar, setting a previous record low of 2.0010 to the US currency.
Turkey is caught up in a currency turmoil that is also spreading across emerging economies in Asia, Latin America, Russia and South Africa as investors pull out some funds because of the imminent change in the US monetary climate as well as in global interest rates.
The pressure on the economy has been building up in recent months and continued last week despite a decision by the central bank to raise its overnight rate by 0.50 percentage points to 7.75 percent, having raised it by 0.75 points at the end of July.