Turkey's currency slides after Erdogan takes aim at its central bank for hiking rates

Turkey's currency slid Friday as President Recep Tayyip Erdogan took aim at its central bank for sharply raising its benchmark interest rate a day before.

The lira fell as much as 1.6% against the US dollar after

underscored CBRT's intent to remain independent of Erdogan. The president has increasingly tried to wield influence over monetary policy since his reelection this year.

Still, strategists warn the rate hike could backfire. Thierry Wizman of Macquarie Research wrote in a note that the renewed criticism of the CBRT could embolden government officials to pursue more executive power over the central bank, especially if the lira fails to stabilize.

"If it is not effective, Erdogan’s influence and political capital as it pertains to monetary policy will rise," Wizman said. "These are the potential 'non-linearities' that confront Turkey when the policy backdrop is so politically charged, which is itself a huge source of risk."

The lira has been one of the worst-performing currencies this year, shedding more than 60% of its value against the dollar since January.