The Turkish lira edged higher on Thursday after briefly hitting a record low as the country's central bank cut rates more than expected, while a dip in the dollar offered some respite to other emerging market currencies.
The lira stood at 18.58 against the dollar, up from Wednesday's close of 18.6 and a record low of 18.6150 it touched briefly after the rate announcement.
Türkiye’s central bank delivered a bigger-than-expected 150 basis-point cut to 10.5%, and promised to halt the easing cycle next month.
"The interest rate cut doesn't make sense at the current levels because inflation is way too high," said İpek Özkardeşkaya, senior analyst at Swissquote.
Overall, emerging market currencies edged 0.1% higher, while stocks fell 0.4%.
China's yuan erased early losses and inched up against the dollar after media reports that China is considering reducing the COVID-19 quarantine time for inbound travelers to seven days from 10.
China's blue-chip CSI300 Index also recouped some of its losses, closing down 0.6% after falling as much as 1.3% earlier in the day.
China kept its benchmark lending rates unchanged for a second straight month, in line with expectations, as authorities held off unleashing more monetary stimulus to avoid stark policy divergence with other major economies.
Among other EM currencies, the South African rand added 0.2% against a softer dollar.
Most Central and Eastern European currencies advanced against the euro, with the Hungarian forint leading gains.
Poland's zloty rose 0.5% against the euro. Data showed Polish producer prices rose 24.6% year-over-year in September, below forecast.
