The Turkish lira is in 'complete freefall' amid concerns of Erdogan's influence on its central bank

Arnold H. Drapkin/The LIFE Images Collection/Getty ImagesView of the Sultan Ahmed Mosque at sunset. Istanbul, Turkey.

The Turkish lira plummeted to a record low versus the US dollar Tuesday as investors pull cash out of the country ahead of a presidential election next month.

The lira fell 4.8% to 4.9233 per dollar around 8:30 a.m. ET. Overnight it had dropped to a record low 4.9290.

“The currency is in complete freefall and the outlook is still that there is an increased risk of further losses ahead,” Jameel Ahmad, head of currency and market strategy at FXTM, wrote Tuesday.

Turkish President Recep Tayyip Erdogan – a self-proclaimed “enemy” of interest rates – said last week in an interview with Bloomberg TV that if he wins the election, he will take more responsibility for the economy.

“We are still a month away from the upcoming June 24th elections in Turkey, but I do think that traders will be encouraged to price in as much negative news into Turkey as they can before the event,” Ahmad wrote.

The selloff further pressures the Turkish Central Bank, which is scheduled for a policy meeting June 21. Some economists are even anticipating an emergency rate hike before then.

The lira has shed 28.5% versus the dollar this year.

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