Turkish lira may decline throughout 2018 - analyst

Turkey's lira may continue to decline throughout next year as firms repay their dollar debt and capital floods back into the U.S. economy, according to Atilla Yeşilada, an economist and analyst.

The drop in the currency will impact both inflation and the interest rates Turkish firms and consumers pay on debt, which are expected to rise above 20 percent in 2018, Yeşilada said in an article for Paraanaliz.com.

Five or six Turkish banks could also be investigated by U.S. authorities for circumventing sanctions on Iran, increasing both pressure on the lira and their ability to borrow in foreign markets, he said.

The lira hit its lowest level on record on Tuesday, weakening to 3.98 per dollar, as political tensions with the United States and accelerating inflation-hit investor confidence.