Lira falls as Turkey says US waging ‘economic war’

The lira’s current value against the dollar is 6.1 after it had been stable on 6.03 Lira for every Dollar. (Reuters)

Turkey’s battered lira weakened 1.1 percent on Thursday, to stay under pressure of the confrontation between Turkey and the US.

The lira dipped as far as 6.1350 against the dollar from a close of 6.0330 and was at 6.0700 at 0914 GMT, 0.6 percent weaker on the day. The dollar was boosted by US Federal Reserve minutes indicating it would raise interest rates in September.

The lira is down about 40% percent this year, with the crisis in Turkish-US relations exacerbating losses triggered by concerns about President Tayyip Erdogan’s influence over monetary policy.

Cristian Maggio, head of emerging markets strategy at TD Securities, said trading volumes were particularly thin as markets were closed in Turkey all week for the Muslim Eid al-Adha festival.

“The problems of Turkey are not fixed,” he said. “There is not one single structural solution or reform that has been advanced or detailed by the local authorities.”

Erdogan’s spokesman told Reuters overnight that comments by President Donald Trump’s national security adviser showed the United States was targeting Turkey’s economy.

Ankara said that Washington is declaring an “economic war”, and is not respecting the judicial system when it comes to the case of Andrew Brunson.

The lira’s current value against the dollar is 6.1 after it had been stable on 6.03 Lira for every Dollar, according to Reuters.

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

The case of Andrew Brunson, an evangelical Christian missionary from North Carolina who has lived in Turkey for two decades, has become a flashpoint between Washington and Ankara and accelerated a widening currency crisis.

Heavy selling in recent weeks has spread to other emerging market currencies and global stocks and deepened concerns about the economy, particularly Turkey’s dependence on energy imports and whether foreign-currency debt poses a risk to banks.

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Last Update: Wednesday, 20 May 2020 KSA 14:03 - GMT 11:03
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