Turkish Lira Weakens as Central Bank Fails to Assuage Investors

Analysts think the move won’t cure financial problems; increasing interest rates viewed as controversial

ISTANBUL—Turkey’s central bank took steps to undo some of the emergency support it provided to its banks in recent weeks, reviving investor concerns over the nation’s financial stability as the Turkish lira continued its slide against the dollar.

Ratings firm Moody’s also rattled investors by downgrading 18 Turkish banks on fears they will face growing difficulties in difficulties in refinancing foreign-currency loans.

“There...