Turkey’s lira dropped below 8 per US dollar for the first time amid deepening scepticism over the central bank’s efforts to shore up the currency at a time of rising geopolitical tensions. The lira fell as much as 1.2 per cent to 8.0584 per US dollar at 11.04am in Istanbul on Monday, leading declines among emerging market currencies and extending a nine-week streak of depreciation – its longest decline since 1999. Turkey’s central bank rattled investors last week by unexpectedly keeping rates on hold, a move that halted a brief recovery in the currency ahead of the decision. The regulator has already spent foreign exchange reserves faster than any other major developing economy to try to support the lira. Foreign investors sold $13.3 billion of Turkish equities and bonds this year, the most since at least 2005. “The lira appreciated ahead of the CRBT announcement on the expectation of further hikes, which did not materialise,” Ehsan Khoman, head of Middle East and North Africa research and strategy at MUFG Bank in Dubai, said in a report. “This raises credibility considerations on the commitment of policy makers on prudent policies in a consistent manner.” Foreign investor interest in Turkish assets is being additionally sapped by a string of geopolitical risks. President Recep Tayyip Erdogan’s government faces possible US sanctions over the purchase of a missile system from Russia and is engaged in territorial disputes in the eastern Mediterranean and the Caucasus. The selloff in the lira may be exaggerated, according to Piotr Matys, an emerging market strategist at Rabobank in London. The relative strength index, a momentum indicator of whether an asset has been under- or oversold, for the dollar-lira pair moved above 70 for the first time in a week – a level that suggests the currency may be poised to reverse. Still, “the market was left deeply disappointed following last week’s meeting” of the central bank, Mr Matys said. “The path of least resistance is still skewed to the upside due to growing concerns about sanctions and geopolitical tension.” On Sunday, President Erdogan challenged the US to sanction the country over its purchase of Russian S-400 missile defence systems. He also stepped up criticism of Europe’s treatment of Muslims, repeating his call for French counterpart Emmanuel Macron to get psychiatric help. The lira has lost more than 25 per cent this year, the worst-performing currency in emerging markets after the Brazilian real. The Borsa Istanbul Banks Index was trading 1.9 per cent lower.