Investing.com - The Turkish lira recovered from record lows against the dollar on Monday after Turkey’s central bank said it will hold an emergency meeting on Tuesday, to discuss measures to ensure price stability.
USD/TRY was down 1.16% to 2.3098 after rising to highs of 2.3895 earlier in the session.
"The Monetary Policy Committee is to convene on January 28 to evaluate recent developments and take precautions which are necessary for price stability," the bank said in a statement.
The announcement came after the lira hit the latest in a series of record lows against the dollar after a direct currency market intervention by the central bank late last week failed to stem the steep depreciation in the currency.
The statement sparked speculation that the bank will hike interest rates. The central bank has held back from interest rate increases, amid political pressure to avoid higher borrowing costs, which could act as a drag on growth.
The selloff in the lira was triggered by investor concerns over local political tensions, after a wide ranging corruption probe launched in December, focusing on figures close to the ruling APK party, forced a cabinet reshuffle.
Turkey’s lira is also seen as particularly vulnerable among emerging market currencies to reductions in the Federal Reserve’s asset purchase program, as the country relies heavily on foreign investment to fund its large current account shortfall.
The lira looks likely to remain vulnerable ahead to the outcome of the Fed’s monthly meeting on Wednesday, amid expectations for a reduction in its bond buying program to USD65 billion from the current USD75 billion.
Elsewhere, Argentina’s peso remained in the spotlight after falling 11% against the dollar on Friday, its steepest fall since the country's 2002 financial crisis. USD/ARS edged up 0.02% to 7.9909, holding just below Friday’s highs of 8.1502.
Argentina's central bank said Friday it was loosening strict foreign exchange rules, giving up its traditional policy of supporting the currency through interventions.
Meanwhile, South Africa’s rand and the Russian ruble pulled back from almost five year highs against the dollar. USD/ZAR was up 0.44% to 11.1388 after rallying more than 1% earlier to hit highs of 11.2127, while USD/RUB was up just 0.10% to 34.557, down from session highs of 34.791.