The Turkish Lira suffered its biggest daily fall in nearly 10 years on Monday 6th of August as investors eyed growing tensions between Turkey and the US.
Relations between Turkey and the United States have deteriorated sharply over the last week with Washington imposing sanctions on two Turkish ministers over Turkey’s detention of US pastor Andrew Brunson on terrorism charges.
One Monday the Lira fell around 5.5% against the dollar, its biggest single day drop in nearly 10 years, after the Trump administration said it was reviewing Turkey’s duty free access to US markets, a move that could affect $1.7bn of Turkish exports.
Turkey’s central bank has now reduced banks’ foreign currency reserve requirements to try to stabilise the falling Lira. The currency has lost more than 27% of its value this year alone.
Yields on local debt continued to climb, with the benchmark 10-year bond yield hitting 19.75%.
