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Toxic Mix Brewing for Ailing Lira as Turkey Economy Shrinks

Turkey’s economy contracts for first time in seven years
Lira extends sharpest drop among emerging peers this quarter

Bloomberg business news — Lira Leads Declines Among Emerging-Market Currencies

By

Constantine Courcoulas and

December 12, 2016, 3:13 PM UTCUpdated onDecember 13, 2016, 1:41 PM UTC

Defending the lira has just gotten harder.

The central bank is already under pressure from politicians including President Recep Tayyip Erdogan to cut rates and support the economy, which contracted in the third quarter for the first time in seven years. So while “the plunging lira argues for a hike,” the central bank will struggle to raise rates after this data, said Win Thin, the head of emerging markets at Brown Brothers Harriman & Co. in New York.