Turkish lira crashes as no deal with US is in sight

Markets 8/10/2018, 8:15 AM
Turkish lira crashes as no deal with US is in sight

Market participants showed little excitement on Friday about Turkey's plan for an economic overhaul. President Recep Tayyip Erdogan and Minister of Finance and Treasury Berat Albayrak, also his son-in-law, were expected to lay out a new model today, but the country's currency continued to slide. The lira fell to record lows as there was no sign of a breakthrough in a high-ranking delegation's negotiations in Washington with counterparts from the Department of State.

The case of pastor Andrew Brunson from the United States, who is in house arrest in Turkey, was the latest stumbling point in bilateral relations, and led to sanctions against officials on both sides. The two governments are also at odds over Erdogan's cooperation with Russia and Iran, particularly regarding Turkey's intervention in Syria.

The dollar spiked 10.7% to 6.1347 at 8:15 am CET. This year the rate surged 61.85%, while it rose by nearly a quarter since the beginning of August. The euro was 10.9% higher, buying 7.1058 Turkish liras. The European Central Bank is said to be concerned about the exposure of lenders from the Eurozone to Turkish credit and financial assets.

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USD/TRY-0.10%

5.7800
Chart for: USD/TRY Spot

EUR/TRY-0.18%

6.68985
Chart for: EUR/TRY Spot