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Turkey’s lira strengthened through 7 per dollar to its highest level since early August, benefitting from a surge in investor interest in emerging markets, Ahval news outlet reported. 

The lira was trading up 0.9 percent at 6.96 per dollar at 1:03 p.m. local time in Istanbul, extending gains since a record low in November to 19 percent.

The Turkish lira is leading a global rally in emerging market currencies after the central bank more than doubled its benchmark rate to 17 percent since September and pledged to keep monetary policy tight through this year. The lira had hit its all-time low of 8.58 per dollar on Nov. 6.

The dollar posted its biggest drop last week, pushing the MSCI index of emerging market currencies to its highest level on record on Friday. The gains underscore investor optimism about a vaccination-led global economic recovery.

Under the country's new central bank governor Naci Agbal Ağbal, Turkey’s central bank has vowed to prioritise the battle against inflation and slow annual price increases to a medium-term target of 5 percent. Inflation edged up to 15 percent in January.

HSBC said last week that the lira could rally to 6.5 per dollar in the short term. A February survey of finance industry professionals and industrialists by the central bank saw the lira trading at 7.79 per dollar by the end of the year. The prediction stood at 7.98 per dollar in January.