September 3, 2018 / 6:00 AM / a month ago

UPDATE 1-Turkish lira weakens ahead of inflation data

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ISTANBUL, Sept 3 (Reuters) - Turkey’s lira eased against the dollar on Monday ahead of the release of August inflation data, as investors nursed worries about President Tayyip Erdogan’s unorthodox views and influence over monetary policy.

The lira traded at 6.6000 at 0535 GMT, weakening from Friday’s close of 6.5483.

The Turkish currency has lost around 42 percent of its value this year in a sell-off that accelerated in the wake of a diplomatic row between Ankara and Washington over the trial of American pastor Andrew Brunson in Turkey.

Consumer price index data, due to be released at 0700 GMT, is expected to show a 2.23 percent rise in August over the July level due to inflationary pressures stemming from higher energy and food prices and a weaker lira, according to a Reuters poll.

Erdogan, a self-described “enemy” of interest rates, has repeatedly called on the central bank to lower borrowing costs, raising worries about the bank’s ability to rein in Turkey’s double-digit inflation.

Inflation hit a 14-year high in July, to stand at 15.85 percent year-on-year, propelled by double-digit increases in transportation, household equipment and food costs.

In late July, state pipeline operator Botas increased the price of natural gas for electricity production by 50 percent and by 9 percent for residential use, it also applied a further increase on Saturday.

Turkey imports almost all of its energy needs, and the lira’s sharp depreciation has driven up prices. (Reporting by Ali Kucukgocmen, Editing by Ezgi Erkoyun & Simon Cameron-Moore)

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