Turkey’s lira tumbled as much as some 3.5 percent on Thursday, giving up all of this year’s gains as US bond yields continued to rise.
The currency stood at 7.3650 against the dollar at 1901 GMT, compared to a close of 7.17 on Wednesday. Earlier, it weakened 3.6 percent to 7.44, the closing level of 2020.
The yield on the US Treasury’s 10-year bond spiked above 1.6 percent on Thursday, leading investors to dump emerging market currencies, sending them down between 2-4 percent.
The lira had rallied more than 20 percent since November, after the finance minister and the central bank governor were replaced.
But the currency reversed course this week, ending a three-month rally as the government defended former finance minister Berat Albayrak’s policies, which sent the lira down 5 percent compared to Friday’s close.
Albayrak oversaw some unorthodox policies, which included state banks selling some $130 billion in dollars during his two years in office, which sharply depleted Turkey’s FX reserves.
The currency also shed about half its value in the same period.