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Turkish currency drops to new record low against U.S. dollar

Xinhua, April 14, 2015 Adjust font size:

As Turkish lira dipped to another record low against U.S. dollar, Turkish Central Bank announced Tuesday that it will discuss an interest rate cut on one-week foreign-exchange deposits on April 22.

The Turkish lira plumbed another record low against the dollar on April 14 to 2.6740, as the U.S. dollar index rose to an historic high.

Experts believe that the dollar's strength was the major driver behind the decline in the Turkish lira, as well as other currencies, as certain statistical evidence point to a large-scale dollar demand across the world.

Investors also punished the currency on fears of rising political instability ahead of the June parliamentary election. Analysts are also negative about the influence the possible coalition government after the elections will have on Turkish economy.

Turkish President Tayyip Erdogan has bruised sentiment by fulminating against high interest rates, comments which have raised concern about the independence of the Central Bank.

Turkish Central Bank said on its website the Bank's Monetary Policy Committee will discuss an interest rate cut on one-week foreign-exchange deposits and a measured hike in the partial remuneration rate on Turkish lira reserve requirement on April 22.

On March 9, Turkish Central Bank cut the one-week deposit rate for dollars from 7.5 percent to 4.5 percent, in line with global interest rate developments.

The lira has lost 12 percent to the dollar this year, the worst performer among all major emerging market currencies except Brazil's real. Enditem