Turkish lira hits new record low against US dollar

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Turkish lira hits new record low against US dollar

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Turkey’s currency troubles deepened on Monday as the country’s lira hit a new low against the US dollar.

Political tensions, notably a high-level corruption scandal engulfing Prime Minister Recep Tayyip Erdogan’s government are thought to have helped compound the latest slump.

The drop marks another new record low against the dollar, with investors already concerned the country is ill-placed to cope with the US Federal Reserve raining in quantitative easing.

Turkey has one of the biggest current account deficits of any major economy.

The country’s central bank has shied away, for the moment, from cutting interest rates, preferring to prop up the lira by selling Turkey’s dollar reserves.

But some analysts believe the bank may be forced to raise rates, should the political situation in Turkey fail to improve.