Turkish Lira Dips 8% despite Central Bank Intervention

Turkey’s central bank intervened to arrest the plunge in the lira, which lost as much as 8% of its value against the dollar on Friday in an ongoing crisis that is straining the country’s financial system.

Istanbul’s stock market was twice forced to halt trading and the Turkish lira continued to fall Friday as concerns deepened that recent interest-rate cuts could cause an inflationary spiral.

Turkey's benchmark Borsa Istanbul 100 index also sank 8.5% in its worst day since March, triggering two circuit breakers that halted traders.

The lira lost as much as 8% of its value against the dollar, despite the central bank intervention to arrest the decline in the country's currency.

The crash followed another decision of the central bank yesterday to cut rates, under pressure from President Recep Tayyip Erdogan by 100 basis points to

Economists urged Turkey to raise interest rates to contain rising inflation, which reached more than 21% last month.

The drop in the Turkish currency puts pressure on the banking system and squeezes' citizens as their savings evaporate