Turkey’s lira fell to a record low of 9.85 per dollar on Monday after President Tayyip Erdogan said over the weekend that he had ordered the expulsion of the ambassadors of nine Western nations from the country, Reuters reported.
The lira subsequently rebounded, last fetching 9.7150 and was quoted at 9.7200-9.7600 at 0441 GMT.Â
Last week, the Turkish currency plunged to record lows after the Turkish central bank cut its policy rate by 200 basis points, despite rising inflation, a move that economists and opposition lawmakers criticized as reckless.Â
“The central bank is clearly signaling that growth takes precedence over inflation,” said Win Thin at Brown Brothers Harriman, quoted by Reuters.
He said another rate-cut is likely at the next policy meeting on November 18.
“On top of deteriorating fundamentals, tensions with the West are likely to continue rising after President Erdogan said that ambassadors from ten nations were no longer welcome in Turkey,” he added.
On Saturday, Erdogan announced that he had ordered his foreign ministry to expel the envoys for seeking the release of businessman and philanthropist Osman Kavala, who has been imprisoned for four years without being convicted.