Istanbul — Turkey’s lira tumbled further, hitting new record lows against both the dollar and the euro, as increasing US Treasury yields deepened a rout in the currency.
The lira led losses in emerging markets on Monday, to extend last week’s slide of about 4%.
The higher US yields are intensifying the pressure by reducing the allure of riskier assets.
A lack of action by the Turkish central bank, meanwhile, disappointed investors hoping for interest rate increases.
The lira was 1.8% lower at 4.5736 to the dollar by 2.33pm in Istanbul, after falling to a record low 4.5751.
One-month implied volatility on the dollar-lira pair, an indicator of expected swings, surged to 22%, extending its climb to the highest level since January 2017.
The yield on 10-year Turkish government bonds rose 16 basis points to 15.22%, a new record.
“We do not want to sound like a broken record, but after the lira plunged to yet another record low it is evident that unless the central bank acts decisively and raises interest rates substantially at an emergency meeting, the sell-off is likely to continue,” said Piotr Matys, an emerging-market currency strategist at Rabobank in London.