(Adds bonds, shares, Halkbank)
ISTANBUL, May 17 (Reuters) – The Turkish lira weakened against the dollar on Thursday as investor concerns about monetary policy persisted despite the central bank saying it would take action against a sell-off in the currency.
Worries about President Tayyip Erdogan’s influence over monetary policy have driven losses in the lira, which has weakened more than 15 percent against the dollar this year.
The lira traded at 4.4475 against the dollar at 0707 GMT, weakening from a close of 4.4160 on Wednesday. It touched a record low of 4.5010 on Wednesday before rebounding after the central bank issued a statement.
The bank said it was closely monitoring “unhealthy price formations” in markets and will take necessary steps, considering the impact of these developments on the inflation outlook. It is scheduled to hold a policy-setting meeting on June 7.
In a measure responding to lira weakness and rising crude oil prices, the country’s Official Gazette on Thursday said Turkey will lower the special consumption tax level to offset any fuel price rises driven by these factors.
Erdogan, a self-described “enemy of interest rates”, said earlier this week he planned to take greater control of the economy after presidential and parliamentary elections on June 24, exacerbating fears about central bank independence.
The main share index rose 0.61 percent to 102,157.88, with shares in state lender Halkbank rising 6.87 percent after a U.S. judge sentenced one of its executives to 32 months in jail over his part in a scheme to help Iran evade U.S. sanctions.
The yield on the benchmark 10-year bond was at 14.76 percent, unchanged from its level on Wednesday. (Reporting by Ebru Tuncay; Writing by Daren Butler; Editing by David Dolan)