ISTANBUL: The Turkish lira weakened to an all-time low of 2.4734 against the US dollar in line with other emerging currencies on Friday after US employment data opened the door to mid-year rate hikes by the Federal Reserve (Fed).
US job growth rose solidly in January and wages rebounded strongly, a show of underlying strength in the economy that puts a mid-year interest rate increase from the Fed back on the table.
Friday’s strong US jobs data reinforce expectations of Fed rate hike in June this year. The Fed rate hike raises the stakes for the Central Bank of Turkey which is currently under intense political pressure to cut rates. Turkish benchmark index Borsa İstanbul (BIST) was down more than 1 percent at 84,919 points on Friday. Government bond yields rose on Friday and lira maintained its weakness. Lira is already under pressure from the central bank cutting rates prematurely.
