Istanbul : Turkey's lira slipped as much as 1.7% on Thursday, and has shed some 22% in the last nine trading sessions, on persisting investor concerns about a surge in inflation to a 19-year high after a series of unorthodox interest rate cuts.

The currency weakened to 13.89 against the dollar, before trimming its losses to 13.745 by 0800 GMT. Last year it slumped 44% in its worst year since President Tayyip Erdogan's AK Party came to power in 2002.

Simone Kaslowski, chairman of Turkey's leading TUSIAD business association, said on Wednesday evening the leap in annual inflation to 36.1% clearly showed the need to reconsider the policy steps Turkey has taken.

Market interest rates were rising despite the central bank rate cuts and dollarisation was continuing to increase, he said, questioning whether Turkey was "missing the big picture as we turn to short-term temporary solutions".

"Time is precious. As a country, the cost of using this time more properly is even higher now than before."

Finance Minister Nureddin Nebati said on Wednesday the government would now prioritise the fight against inflation, but added that it had abandoned "orthodox policies" and was charting its own course.

Economists predict inflation will rise further this year and a series of large administered price rises - including for utilities and wages - illustrated the inflationary pressures.

Urged on by Erdogan in his bid to boost economic growth through higher production and exports, the central bank has lowered its policy rate by 500 basis points to 14% since September.
Source : Reuters