The Turkish lira continued its decline against the US dollar, and reached a new record low, as investors expected the Central Bank of Turkey to continue lowering interest rates.
The USD/TRY pair set a record high at 15.2880, but then retreated slightly, and is now trading with an increase of 2.74%, at 15.1925.
Experts predict that following the December meeting - the results of which will be announced today at 11:00 GMT - the Central Bank of Turkey will reduce the main interest rate by another 1%, to 14%, despite extremely high inflation in the country (in November, the consumer price index rose to a 3-year high and amounted to +21.3%).
Over the past three months, the Central Bank of Turkey has lowered the rate by 4%, yielding to the pressure of the Turkish president, who is an ardent supporter of a soft monetary policy. Against the background of a significant reduction in the rate, the Turkish lira collapsed by more than 40% against the US dollar, recording the worst result among emerging market currencies.