ISTANBUL: The Turkish lira slid to its second straight record low on Friday, as investors pummelled the currency over concerns about political stability and central bank independence ahead of June parliamentary elections.
The lira has been hammered this year - underperforming nearly every other major emerging market currency - with analysts expecting little respite until at least after the June 7 polls.
Faced with flagging economic growth, President Tayyip Erdogan has repeatedly called for lower rates, even as the lira's tumble risks stoking inflation. He has said that those who defend high rates are "traitors".
"Markets are increasingly focused on what the elections may deliver and when you have an increasingly authoritarian government in place, (election risk) is always unsettling," said Neil Shearing, head of emerging markets at Capital Economics In a sign of its difficult political position, the central bank this week held off from what economists say was a much-needed rate hike and instead attempted to use other policy tools to shore up the currency, such as hiking what it pays on lira reserves.
But such moves have been unable to halt the lira's relentless slide and it touched a record 2.7351 to the dollar, weakening beyond the 2.7343 hit in New York trade on Thursday.
The main BIST 100 stock index was 0.76 percent firmer.
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