(Bloomberg) -- Turkey’s lira weakened to new records against the dollar and euro as investor concerns about an overheating economy and unresponsive central bank mounted.
The currency fell past 5 per euro and 4.07 per dollar as of 1:04 p.m. in Istanbul. It’s down about 9 percent against the euro this year, the worst performance in emerging markets behind Argentina. Investors have called for higher interest rates to moderate an economy they say is overheating, but Turkey’s responded instead with a series of stimulus measures aimed at boosting growth.
“This mismanagement of the currency leads to a loss of confidence in the purchasing power of the lira which is hard to cure,” said Lutz Roehmeyer, who helps oversee about $14 billion at Landesbank Berlin Investment GmbH. “Only massive one-off hikes can heal this situation, which is of course not popular as it slows the economy."
