Turkish lira extends post-crisis low as virus raises specter of deeper rate cuts
Turkey’s lira fell as some investors bet the central bank would approve deeper cuts to interest rates than expected to soften the economic impact of the coronavirus.
The lira dropped 1.4 percent to 6.41 per dollar at 4:55 p.m. in Istanbul, extending the lowest levels since a currency crisis in the summer of 2018. Most other emerging market currencies also slid, with the South African rand down 2.1 percent. The main BIST-100 index of shares slumped 8.9 percent to 87,085 points.
The central bank is set to meet on Thursday to consider the level of interest rates. Policymakers will cut rates by at least 50 basis points to 10.25 percent, according to a Reuters poll published on Monday, with one economist predicting a reduction of 150 basis points. Reuters said it would continue to question economists as expectations may be changing after the U.S. Federal Reserve cut rates at the weekend.
Turkish Treasury and Finance Minister Berat Albayrak said on Monday that the authorities would implement a series of measures to bolster market liquidity and to support various sectors of the economy. President Recep Tayyip Erdoğan, who has called for lower borrowing costs for businesses, will announce the steps this week, Albayrak said on Twitter.
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