The Turkish lira fell against the dollar, on Tuesday, to its weakest levels in regular trading since last May, ahead of an imminent decision by the central bank on monetary policy and amid investor concern about the tensions in Idlib, Syria, where Turkey is massing its forces.
A Reuters poll concluded that the Turkish central bank, which has reduced its interest rate by 1275 basis points since July, will likely cut interest rates by another 50 basis points to 10.75 percent tomorrow, Wednesday.
Investors say that excessive monetary easing may undermine the currency's strength in light of rising inflation in recent months.
Some investors are also concerned about the expected escalation of the conflict in Idlib, northwestern Syria, as Turkey sent thousands of soldiers and military vehicles there and gave the Syrian government forces a deadline until the end of the month to withdraw from observation posts besieged in its recent progress.
At 09:17 GMT, the lira recorded 6.0695 to the dollar, after weakening to 6.0710 compared to 6.0485 at Monday's close.
During a "flash crash" in Asian trading last August 26, the lira briefly touched 6.47, amid extremely low liquidity at the time.
The Turkish lira has lost about two percent since the beginning of the year against the dollar, in addition to a fall of 36 percent over the past two years. Sparks erupted during the currency crisis in 2018.
The benchmark index of the Istanbul Stock Exchange fell 0.9 percent, as the banking sector index fell more than one percent. European shares also fell after a revenue warning from Apple highlighted the impact of the Coronavirus outbreak on global supply chains.
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