ISTANBUL, March 10 (Reuters) - Turkey's lira slid for an eighth consecutive session on Thursday on concerns about the impact of the Ukraine crisis and sanctions on Russia, particularly its effect on already surging inflation and the widening current account deficit.
The lira weakened 0.5% to 14.7600 against the dollar, bringing its losses this year to nearly 11%. It had already lost 44% of its value last year.
Fallout from the Ukraine crisis means authorities "have to let the lira depreciate somewhat because of limited reserves," said Roger Kelly, lead regional economist at the European Bank for Reconstruction and Development.
"More FX reserves would help but the Ukraine situation is likely to blow a big hole in the expected $34 billion tourism revenues this year," he said.
"They may need to reconsider their low interest rate policy."
The central bank began an easing cycle in September and has slashed its policy rate by 500 basis points to 14% since then, triggering the currency crisis.
At one point on Dec. 20 the lira hit a record low of 18.4 to the dollar, triggering action by Ankara to underpin the currency with a scheme to protect lira deposits against depreciation, alongside costly forex market interventions.
Under the scheme, the Treasury makes up for the difference between the interest rate on lira deposits and the currency's depreciation on the maturity date. The authorities' actions helped to keep the lira steady until late February.
President Tayyip Erdogan had sought to turn Turkey's chronic current account deficits to a surplus, while raising growth, exports and employment thanks to the low rates.
However, surging energy and commodity prices due to Russia's invasion of Ukraine are likely to widen energy import dependent Turkey's deficit and stoke inflation, which is already at 54%.
Investor attention was in part focused on meetings which the foreign ministers of Russia, Ukraine and Turkey were holding in southern Turkey on Thursday, with Ankara hoping they could mark a turning point in the raging conflict.
Reporting by Jonathan Spicer and Nevzat Devranoglu Writing by Daren Butler Editing by Dominic Evans
Source: Reuters