Turkish Currency Hits New Low of 2.20 Lira to Dollar

The Turkish currency plunged further on Thursday as the government grappled with its worst crisis in years, hitting a new low of 2.20 lira to the dollar.

In late morning trading, the lira was changing hands at 2.2047 to the dollar and 3.0058 to the euro. The Istanbul stock exchange was also down 1.0 percent at 67,452.75 points.

The currency had already broken through the key psychological barrier of 3.0 to the euro on Tuesday.

It has lost about nine percent against the dollar since a corruption scandal embroiling the government of Prime Minister Recep Tayyip Erdogan erupted in mid-December.

Analysts have raised concerns about the impact of the political crisis on the economy, which is at risk from external imbalances and is forecast to experience a slowdown in growth to four percent this year from a peak of close to nine percent in 2010.

The government has blamed what it describes as a "coup plot" by supporters of an influential Islamic preacher for the turmoil.

"Whenever Turkey improves its investment climate, exports goods and services to the world ... we see various attacks and coup plots against democracy and national will," Interior Minister Efkan Ala said at a conference of Turkish ambassadors in Ankara.