The Turkish lira weakened on Thursday as investors took a cautious stance ahead of the central bank‘s rate-setting meeting, where it was expected to hike rates sharply to support the ailing currency.
At 0548 GMT, the lira was at 6.3700 against the dollar, easing from Wednesday’s close of 6.3450. It has lost 40 percent of its value against the U.S. currency this year but has rebounded from a record low of 7.24 percent a month ago.
The central bank will announce its rates decision at 2 pm (1100 GMT) and predictions for a hike ranged between 225 to 725 basis points in a Reuters poll, with the bank balancing concerns over lira weakness with worries about an economic slowdown.
The lira slump has been driven by concerns about President Tayyip Erdogan’s influence on monetary policy and more recently a bitter row with the United States.
The central bank and the government have taken a series of measures to support the lira and on Thursday Erdogan ruled that property sales and rental agreements must be made in lira, putting an end to such deals in foreign currency.