ZCZC
BCN-32
TURKEY-ECONOMY-FOREX
Turkey lira loses 5% against dollar, hits record low
ISTANBUL, Aug 10, 2018 (BSS/AFP) – Turkey’s embattled lira on Friday hit
new record lows against the US dollar, losing some five percent in value as
strains with the United States showed no sign of easing and fears grew over
the exposure of European banks.
The lira was trading at 5.85 to the dollar, a loss in value on the day of
5.5 percent. However it had rallied somewhat after earlier crashing some 12
percent through the 6.0 level for the first time in history, trading at one
point above 6.2.
The lira has now lost over a third of its value against both the dollar
and the euro this year, with the currency battered by both concerns over
domestic economic policy and the political situation.
Turkey remains at loggerheads with the United States in one of the worst
spats between the two NATO allies in years over the detention for the last
two years of American pastor Andrew Brunson and a host of other issues.
Talks this week in Washington failed to resolve the impasse which has led
both sides to slap sanctions on senior officials amid fears of graver
measures to come.
Meanwhile, markets are deeply concerned over the direction of economic
policy in Turkey where inflation has hit nearly 16 percent but with the
central bank reluctant to raise rates in response.
President Recep Tayyip Erdogan after winning June 24 elections with
revamped powers tightened his control over the nominally independent central
bank and appointed his son-in-law Berat Albayrak to head a newly-empowered
finance ministry.
Concerns were intensified Friday by a report in the Financial Times that
the supervisory wing of the European Central Bank (ECB) had over the last
weeks began to look more closely at euro zone lenders’ exposure to Turkey.
The report said that the situation is not yet seen as “critical” but
Spain’s BBVA, Italy’s UniCredit and France’s BNP Paribas are regarded as
particularly exposed.
BSS/AFP/HR/1405