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Turkish lira hits record low against dollar after unexpected rate cut

Person, Human, Money Creative Commons
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Turkey’s lira hit an all-time low against the dollar in early trade on Monday, bringing its losses so far this year to more than 28 percent and extending its decline following an unexpected rate cut last week.

The lira stood at 18.4440 against the greenback, as of 0453 GMT, weakening from Friday’s close of 18.4280. Earlier, it touched a record low of 18.4450.

The central bank unexpectedly cut its policy rate by 100 basis points last week to 12 percent, citing an economic slowdown despite inflation running higher than 80 percent in August.

The lira lost 44 percent against the dollar in 2021, mainly due to an unorthodox easing cycle that saw the central bank lower the policy rate by 500 basis points at the end of last year.