The lira weakened against the dollar after President Recep Tayyip Erdogan said Turkey should cut interest rates just hours before the central bank is due to review policy.

Speculation had been growing that the monetary authority would deliver a sizeable interest-rate increase on Thursday after it signaled potential action last week to help stem accelerating inflation.

The lira fell as much as 1.6 per cent to 6.4584 per dollar.

The median estimate in a Bloomberg survey of economists is for a 325-basis-point increase to the one-week repo. The decision is due at 2 p.m. local time.