Turkey's currency on Wednesday took a fresh pounding to hit new historic lows, as emergency measures by the central bank failed to impress markets rattled by terror attacks and political instability. The lira has lost over 10 percent in value against the American dollar since the start of this year alone with President Recep Tayyip Erdogan's plan for a presidential system, currently debated by parliament, unnerving investors.
The lira lost 2.4 percent against the dollar to trade at 3.88 to the greenback, having earlier reached a new historic low in value of 3.90. Against the euro, the lira crashed through the 4.0 ceiling for the first time in history to trade at 4.09 to the euro, a loss of 2.0 percent in value on the day.
Economists have expressed alarm that the pressure could continue due to concerns over security and political stability, as Erdogan drives for a presidential system under a new constitution expected to lead to a referendum in early spring. The central bank on Tuesday sought to halt the slide by relaxing foreign exchange rules to inject 1.5 billion dollars into the market. But the move failed to halt the bloodletting on the markets with analysts saying more was needed.
"Directionally, we see these measures as supportive for the currency," economists at Finansbank said in a note to clients. But they added: "In terms of magnitude, however, it is a different story. We think the impact on currency is likely be limited." Despite the turbulence that has seen the lira lose 25 percent against the dollar in the last three months alone, Turkish officials remained unruffled.
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