The Turkish lira weakened around 1 percent against the dollar on Wednesday as emerging market currencies came under pressure ahead of a US interest rate decision and amid ongoing concerns about political influence over Turkish monetary policy.
The lira has lost around 18 percent against the dollar this year, making it one of the worst-performing emerging market currencies. It has been hit by concern about President Tayyip Erdogan's influence over monetary policy and looming elections. The Turkish currency stood at 4.6400 against the dollar at 1321 GMT, weakening from Tuesday's close of 4.5950. It briefly touched a low of 4.6975 earlier in the day.
The US Federal Reserve is widely expected to raise rates for the second time this year on Wednesday after a move in March. Investors want to see the outlook for future monetary tightening amid ongoing economic expansion. The yield on the benchmark 10-year bond rose to 16.25 percent from 15.58 percent in spot trade on Tuesday. Turkish industrial production grew by a calendar-adjusted 6.2 percent year-on-year in April, official data showed on Wednesday. The main BIST 100 share index fell 0.8 percent to 94,535 points.
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