Dollar Hit New Record Level Against Lira On Rate Cut Concerns

Dollar hit new record high level against lira at 2.4188, on interest rate concerns on both domestic and international basis, on Thursday.

Dollar's recent rally against lira started on January 27, after Central Bank of Turkey Governor Erdem Basci signalled a rate cut on Fabruary 4, the day after the January inflation to be announced by Turkstat.

"We could hold a meeting to take a rapid decision. If January inflation falls more than one point and core inflation is good, we could even make an assessment on February 4" Basci told a news conference on the bank's quarterly inflation report.

The central bank cut its main one-week repo rate last week by 50 basis points but drew a rebuke from government ministers who said it was not enough to support growth.

Dollar rally started at around 2.36 lira and surged to over 3.39 lira on Thursday, following the US Federal Reserve Board's statement on interest rates, after a two-day meeting.

Fed's signal that it was on track to raise interest rates this year also fuelled the dollar against the lira, which rose as far as 2.4188 lira, the historical record level. - Istanbul