The Turkish lira fell to a record low of 8.56 against the dollar, or as much as 1.7 percent, which may increase the volume of inflation sitting at 12%.
According to Douglas Winslow, chief Turkey analyst at Fitch Ratings, the Turkish central bank’s policy of raising interest rates was not sufficient to stem the persistent decline in the value of the Turkish lira.
Winslow added that the bank had "limited independence" from political pressure to lower interest rates and a "record of slow response to events", raising the risk that a loose policy could fuel external imbalances and market instability.
Turkey is ranked at a high risk level by the three major credit rating agencies, and the lira has fallen by more than 30 percent since the beginning of this year.
