Turkish lira weakens to record low against the dollar, down more than 14% on the year
USD/TRY surges higher on the day
The lira is now down 14.2% against the dollar so far this year, making it only behind Argentina's peso as the worse performing currency in the emerging market space. This comes after Turkish president Erdogan commented that he plans to meddle into monetary policy should he come out on top in an election next month.
Erdogan's lack of faith in the central bank as well as his potential interference is making it difficult for the lira, and investors are finding it hard to believe that Turkey will be able to cure worries plaguing the economy.
Investors are largely expecting the central bank to move to hike rates in similar fashion to Argentina - to counter inflation and stabilise the currency - but Erdogan's plans now casts a lot of doubt on whether or not that may materialise.
It's a massive mess right now in emerging markets, and with the dollar strengthening further on the back of higher US yields, it could add for more pain in the EM space should the situation in the likes of Turkey and Argentina start to become a contagion.