ISTANBUL, Oct 8 Reuters - The Turkish Lira weakened 1% against the dollar on Friday, hit by concerns over the credibility of monetary policy credibility as well as the underlying strength in the dollar.
The value of the lira reached 8.9650 at 0821 GMT, off the new all time high of 8.9750 and weaker than a close of 8.8800 on Thursday. The currency has decreased 17% in the dollar this year.
President Tayyip Erdogan is losing confidence in central bank governor Sahap Kavcioglu, less than seven months after he sacked his predecessor, and they have communicated little in recent weeks, three sources familiar with the matter told Reuters.
The sources said Erdogan, who fired three bank governors in the last two years over policy disagreements, was frustrated that an interest rate cut was delayed until just last month. It was unclear what Erdogan might say. If anything, they said?
Last month, the central bank unexpectedly cut its policy rate by 100 basis points to 18%, which analysts said was further evidence of political interference by Erdogan, a self-described enemy of interest rates.
Data since the rate cut showed annual inflation hit an annual high of 19.58% in September two year at a two- and a half years to month baseline.