The Turkish lira touched a new record today, Tuesday, ahead of the US presidential elections, the outcome of which may result in strained relations between the two countries.

The lira also declined after data revealed that the annual inflation rate is close to 12%, despite the central bank’s moves to tighten monetary policy.

The lira - the worst performing currency in emerging markets since the beginning of this year - fell 0.5% to 8.4850 against the dollar, compared to 8.4400 at Monday's close.

The currency has fallen 30% since the beginning of the year due to concerns about possible Western sanctions on Turkey, depletion of reserves, double-digit inflation and monetary independence.

The pound fell by more than 7.5% against the dollar last October, which represented the largest decline in more than two years.

The Turkish central bank recently kept the main interest rate unchanged, contrary to the expectations of analysts who expected to raise interest to control inflation and support the lira.

Analysts say relations between Washington and Ankara could see more tension if Democratic candidate Joe Biden wins the US presidential election.

Société Générale expects the Turkish currency to fall to 9 liras against the dollar by the end of the year.

Last Saturday, Turkish President Recep Tayyip Erdogan said that Turkey is fighting an economic war against "the satanic triangle of interest rates, exchange rates and inflation."