Turkey’s currency hit a fresh historic low against the U.S. dollar Tuesday, after President Recep Tayyip Erdogan said he wanted to take more responsibility for monetary policy in the country, stoking concerns about the independence and credibility of Ankara’s central bank.

The dollar last fetched 4.4411 lira USDTRY, -0.10% , up 1.7%, just below its session and historic high of 4.4749. The buck has rallied 9.3% against the lira in May, and 17.1% in the year-to-date, according to FactSet data.

Erdogan said in an interview with Bloomberg that he planned on being more involved in monetary policy following his expected re-election in a June 24 snap election.

The snap election was called in mid-April, thereby avoiding the previously scheduled November 2019 election. A victory for Erdogan would give him five more years in office. A referendum last year also expanded the powers of the president, which will come into effect after the June vote.

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Erdogan has, in the past, been critical of his central bank, but market participants agreed that his Tuesday comments were the reason Turkish assets TUR, -0.72% , including the lira, got punished.

“Erdogan appears to be determined to completely undermine the central bank, leaving the lira with nowhere to hide,” said Marc Ostwald, global strategist at ADM Investor Services International.

“Investor confidence in Turkey is already at severely low levels,” said Jameel Ahmad, global head of currency strategy and market research at FXTM. “If Erdogan is able to insert more influence around central bank policy and economic matters we can’t rule out the possibility that the lira will weaken all the way to 5 against the dollar by the end of the summer.”

Erdogan wants lower interest rates for Turkey, but the country has been battling double-digit inflation of 10.8% as of April, with economists viewing inflation at around 2% for economies in the developed world as healthy. If his influence extended to the central bank and led it to cut rates, “there would be a risk of removing one of the few options out there to combat dangerously high inflation and encourage inflows into Turkey,” Ahmad wrote.

Turkey remains a high-yield haven for now, where investors get more bang for their buck than in any other non-frontier emerging market, but if the behavior of Turkish assets of late tells us anything, it’s that the yield may not be enough to compensate for the risk anymore, said Alessio de Longis, PM and macro strategist at Oppenheimer Funds.

The consistent problem for Turkey, de Longis said, was a lack of credibility. “Having no separation between politics and monetary policy is at the heart of the credibility question.”

Besides the credibility problem for the Central Bank of the Republic of Turkey, Ankara has also been under immense pressure from the strengthening dollar DXY, +0.37% and rising interest rates in the U.S. and elsewhere, because Turkey relies heavily on external funding.

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According to Oxford Economics’ Evghenia Sleptsova and Michiel Tukker, the country’s external financing needs are estimated at around 20% of gross domestic product, and makes Turkey particularly vulnerable to changes in global risk sentiment.

“Our sovereign risk indicator suggests credit ratings underestimate these risks,” the economists wrote.

S&P Global Ratings cut Turkey’s foreign currency rating to BB-/B earlier this month, citing risks of a ‘hard landing’, as well as imbalances in its economy.