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Turkish lira hits new record low amid political crisis
Agence France Presse
Tourists change foreign currency to Turkish lira at a currency exchange office in central Istanbul January 2, 2014.  (REUTERS/Murad Sezer)
Tourists change foreign currency to Turkish lira at a currency exchange office in central Istanbul January 2, 2014. (REUTERS/Murad Sezer)
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ISTANBUL: The Turkish lira plunged Thursday to a new low against the dollar and shares also dropped, pressured by a corruption scandal roiling the government.

The lira fell to 2.1778 to the dollar while the main Istanbul stock exchange index lost 1.91 percent to 66,503.69 points.

Turkey’s financial markets have tumbled on political jitters with Prime Minister Recep Tayyip Erdogan’s government rattled by a graft probe that has targeted key allies.

The lira’s continuing fall is despite the central bank’s decision last week to sell off some of its dollar reserves in order to shore up the currency, also hit by the scaling down of the U.S. monetary stimulus policy.

The county’s central bank plans to inject $450 million daily until the end of January.

Deputy Prime Minister Ali Babacan said Thursday the impact of the political crisis was temporary.

“It is a temporary situation. It is to do with the political perception,” Babacan said in Ankara.

He had said Tuesday that the government’s economic growth forecast for 2014 remained at 4 percent despite the turmoil.

A series of tax hikes on cars, cigarettes, alcoholic drinks and mobile phones came into effect in Turkey Wednesday.

A version of this article appeared in the print edition of The Daily Star on January 03, 2014, on page 5.
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