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© Bloomberg. ISTANBUL, TURKEY – NOVEMBER 09: A man exchanges money at a currency exchange shop on November 09, 2020 in Istanbul, Turkey. Finance Minister Berat Albayrak, the son-in-law of President Erdogan who has been in the role for five years, resigned Sunday citing health reasons. The country’s currency has plunged 30 percent this year. After the resignation of Berat Albayrak, Turkish lira gained 3% against $ following the resignation. (Photo by Burak Kara/Getty Images)

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(Bloomberg) — The Turkish currency fell the most among emerging-market currencies as locals took advantage of recent lira strength to buy dollars.

The impact of local demand was more visible due to thin trading on Monday, according to traders. The fell as much as 2.6% to 7.8400 against the dollar and was down 1.9% at 7.7830 as of 11:51a.m in Istanbul.

Dollar appetite among local companies and individuals barely slowed last week, even as the lira soared more than 10% on bets President Recep Tayyip Erdogan wouldn’t stand in the way of a long-awaited interest-rate hike. As predicted by most economists, the central bank increased rates by 475 basis points on Thursday.

At the same time, some traders question Erdogan’s apparent shift toward more market-friendly policies and whether the central bank’s monetary policy can remain independent given the president’s opposition to high interest rates.

©2020 Bloomberg L.P.

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