The pace of declines in the Turkish lira hastened in early Wednesday trading amid increasing signs that policy makers may be scaling back interventions to support the currency.

The lira fell as much as 5.4% to a record low of 22.8537. The currency was 4.8% lower by 9:09 a.m. in Istanbul.

President Recep Tayyip Erdogan’s appointment of former Merrill Lynch strategist Mehmet Simsek as his new treasury and finance minister has sparked expectations of a return to more orthodox monetary policy and raised the prospect of reduced intervention in markets. Since the second round of Turkey’s elections on May 28, the lira has weakened more than 10% against the greenback.

Goldman Sachs Group Inc. analysts recently revised their forecast for the US dollar-Turkish lira pair higher, citing increased pressure on the currency. The bank sees the lira depreciating to 28 per dollar in 12 months, compared with a previous projection of 22, according to a report dated June 3.

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Japanese retail investor flows may have contributed to the currency’s swoon in early Wednesday trading, said Fujitomo Securities Chief Technical Analyst Tetsuya Yamaguchi. “As the Turkish lira kept weakening, there might have been some stop-losses triggered in the lira and yen market,” he said, noting increased volumes in the yen/lira trade.

--With assistance from Yumi Teso.