ISTANBUL: Turkey’s lira continued its descent on Tuesday and for the first time touched 9 versus the euro, as investors weighed whether the central bank could buck expectations and hike rates at its meeting this week to stem the decline.

The lira has fallen 14 of the last 16 days and hit a fresh record low of 7.67 against the dollar by 1504 GMT after closing at 7.6365 on Monday. It is down more than 22% this year, among the world’s worst performers. The currency also hit a record low beyond 9 against the euro, bringing this year’s losses to nearly 26%.

While most economists in a Reuters poll did not expect the central bank to formally hike its policy rate on Thursday, they predicted it would continue backdoor steps to tighten the money supply.

The bank is reluctant to restrict growth just as the economy is recovering from a nearly 10% contraction in the second quarter due to the pandemic, and it has also faced calls for cheaper credit from President Tayyip Erdogan.

While the policy rate stands at 8.25%, backdoor steps have raised the average funding cost to 10.61% as of Monday, from a low of 7.34% in July.