The Turkish lira is tumbling

The Turkish lira is tumbling.

The currency is down by 1.8% at 3.7789 per dollar as of 8:37 a.m. ET.

Moreover, the currency dropped below 4 per euro for the first time ever earlier in the day. It is at 3.9946 per euro as of 8:39 a.m. ET.

Turkey’s central bank announced slight tweaks to its policy on Tuesday in order to support the currency. Reuters reports that the bank cut “forex required reserves, in a move adding $1.5 billion liquidity to the financial system, and vowed additional steps if necessary.”

The lira retraced some of its losses from earlier in the day, but some analysts do not think the slight adjustments will be enough.

“Past reform suggests that these will have little lasting impact,” wrote William Jackson, senior emerging markets economist at Capital Economics, in a note. “The upshot is that, with policymakers clearly spooked by the decline in the lira and [Tuesday’s] moves likely to have only a short-term impact, outright hikes in official interest rates look increasingly likely.”

The lira has been sliding against major currencies since the failed coup in July amid domestic political and economic uncertainties. The currency is down by about 24% against the dollar since then.

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