The Turkish lira hit a record low of against the U.S. dollar, reaching 7.55 at 12:21 in Istanbul local time on Thursday.
The fall follows better than expected economic data in the United States, where the federal reserve upgraded its 2020 GDP outlook, resulting in a depreciation across several emerging currencies as investors shifted to the dollar.
The lira’s weakness comes despite the Organisation for Economic Co-operation and Development (OECD) predicting that the Turkish economy would shrink less than expected this year. The international economic organisation had forecast a 4.8 per cent contraction in 2020. But this was revised to 2.9 per cent in its interim economic outlook published on Wednesday.
On Monday, Moody’s credit agency cut its investment rating of Turkish debt to its lowest-ever level, citing the concerns about Turkey’s foreign currency reserves and growing dollarization.