Turkish lira slips after meeting with Bolton on Syria

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The Turkish lira traded more than 2 percent weaker against the dollar on Tuesday, reflecting investor concern over a possible souring of relations between Ankara and Washington following talks over the US withdrawal from Syria.

The lira weakened to 5.4875 against the dollar by 1351 GMT from Monday’s close of 5.3825. It reached 5.5040 earlier.

US National security adviser John Bolton and his Turkish counterpart discussed the US troop pull-out but, earlier comments by Bolton about the Syrian Kurdish YPG militia prompted a sharp rebuke from President Tayyip Erdogan.

Bolton had said that no US withdrawal would take place until Turkey guaranteed the Kurdish fighters would be safe, a comment Erdogan described as a serious mistake.

SEE ALSO: Turkey to ask US to hand over military bases in Syria

“Erdogan’s statement on Bolton’s earlier comments triggered a weakening in the lira since it might mean a possible disagreement between Turkey and the United States,” a banker said.

Concern over fiscal policy following a pre-election spending announcement by Erdogan, and the possibility that the central bank might cut interest rates prematurely also impacted lira, economists said.

“If the market concerns subside in the coming days, then maybe the lira would stabilize as well but I think what is more important is the continuation of these factors, and some of them will be with us clearly for the time being,” Inan Demir said, senior emerging markets economics at Nomura.

The Borsa Istanbul BIST100 index was up 0.24 percent.

SEE ALSO: The Turkish Lira: Story of its fall amid political, economic uncertainty

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