The Turkish lira (TRY) on March 28 weakened beyond the psychologically important level of 4.0 to the dollar while the cost of insuring exposure to Turkish sovereign debt moved up to the highest level seen since the end of November last year.

Investors remained rattled by economic difficulties such as an overheating economy, sticky double-digit inflation, a surging current account deficit and Turkey’s exposure to Fed rate hikes. Geopolitical woes such as uncertainty over the course of Turkey’s military engagements in Syria and strained relations with both the EU and the US are also not helping sentiment in regard to a country that has now been under a state of emergency for approaching 21 months.

The TRY is 5% down against the dollar so far this year, making it the fourth-worst performer among 26 emerging market currencies, according to Reuters data.

During the day, the TRY briefly touched 4.0150, close to the record low of 4.0375 it recorded last week. It stood at 4.0004 at around 1945 Istanbul time.

Turkish five-year credit default swaps (CDS) moved up 5 basis points (bps) from March 27’s close to 203 bps, according to IHS Markit data.

The day also saw Turkey’s sovereign dollar bonds fall broadly. Its May 2040 issue hit a 13-month low as investors fretted about double-digit inflation that stood at 10.26% in February and the high external borrowing requirements that weigh on the country.

Turkey’s 2040 Eurobond fell 0.13 cents to 101.36 cents in the dollar according to Tradeweb data. That was the lowest price recorded since the start of February 2017.

Many investors are also far from impressed that Turkey’s central bank has not made any substantial move to raise its benchmark policy rate in the face of the inflation and devaluation difficulties. They fear its monetary policy independence has been eroded by the government’s stated and unorthodox desire to see loosening.