ISTANBUL, Oct 26 (Reuters) - The Turkish lira weakened to a record low early on Monday as investors continued to weigh up the central bank's surprise decision last week to leave its policy rate unchanged and raise the top rate in its interest rate corridor.
The lira TRYTOM=D3 touched 7.9850 in early trade and stood at 7.9800 at 0422 GMT, weakening from a close of 7.9650 on Friday. It has lost 25% of its value this year against the U.S. currency.
The central bank had been expected to raise its policy rate by 175 basis points to 12% last Thursday in the face of weakness in the lira triggered by concerns about high inflation and the central bank's badly depleted FX reserves.
However, it left the rate at 10.25% and raised its late liquidity window to 14.75%, saying significant tightening in financial conditions had already been achieved after steps to contain inflation risks.
It has also been hit in recent weeks by geopolitical tensions, including the conflict between Armenia and Azerbaijan and the dispute between Ankara and Athens over maritime rights in the eastern Mediterranean.
(Reporting by Daren Butler; Editing by Krishna Chandra Eluri)