ISTANBUL - The Turkish lira weakened more than 1% to the dollar on Tuesday, surrendering gains which it made at the start of last week, as investors weighed up data showing a fresh surge in inflation to a 24-year high.
The lira was at 17.03 against the U.S. currency at 1232 GMT, dipping from a close of 16.8360. It firmed as far as 16.03 on Monday last week after Turkey acted to boost the currency by restricting lira lending to forex-rich companies.
That was the latest in a series of measures designed to boost the lira after it slumped 44% in value last year following a series of interest rate cuts sought by President Tayyip Erdogan. The currency has tumbled another 22% so far this year.
"Rising inflation and a central bank constrained by Erdogan do not make the recent jump in the lira sustainable," said FxPro senior market analyst Alex Kuptsikevich.
Annual inflation jumped to 78.62% in June, data showed on Monday, fuelled by the war in Ukraine, soaring commodity prices and the lira slide.
In late June, the BDDK banking watchdog restricted access to lira loans for companies subject to independent audit, if they have more 15 million lira ($908,000) of forex cash assets and they exceed 10% of total assets or annual revenue.
The Istanbul Chamber of Industry (ISO) voiced concern about the latest regulations on Tuesday, saying exporters faced serious problems accessing financing.
ISO chairman Erdal Bahcivan described the situation as a "financial bottleneck" resulting from problems caused primarily by the central bank that have become "gangrenous with the recent BDDK regulations".
(Reporting by Ali Kucukgocmen; Writing by Daren Butler; Editing by Ece Toksabay)