Turkish lira continues to plummet over Golan Heights tensions

The Turkish Lira (TRY) weakened against the US Dollar as tension erupted between Washington and Ankara following US President Donald Trump’s Golan Height remarks.

Turkish President Recep Tayyip Erdogan’s answer to Trump’s Golan Height statements that “Israel has Sovereignty over the Golan Heights”, increased the tension of Turkish currency and the USD/TRY exchange rate, which went from 5.44 to 5.6010 on Friday afternoon.

Turkey’s Central Bank also unexpectedly tightened its monetary stance after the lira’s loss, and suspended one-week repo auctions for an unspecified period, “considering the developments in financial markets”. However, the lira continued to fall as much as almost 4 percent, to 5.75 per dollar on Friday evening.

In August last year, the Turkish lira lost a historical 40 percent value against the US dollar over the Pastor Brunson crises. A crisis has re-emerged as the US threatens to cancel the delivery of F-35 fighter jets to Turkey. Washington opposes that NATO member, Ankara, has both F-35 jets and Russia’s S-400 air defense system.

Turkey’s five-year credit default swaps (CDS) also rose again. Starting at 333.81, the CDS rose to 350.25 as the Lira crisis deepened and pressure mounted on Turkey’s dollar debt.

Turkish economist expresses concern over the lira crises 

“The rise of the US dollar, bond interest rate and the CDS risk premium might be because we haven’t seen the election survey result yet,” Professor Cem Baslevent from Istanbul Bilgi University tweeted.

Economist Umit Akcay mentioned that Turkish people have invested in the dollar since the Pastor Brunson crises in August last year. Bloomberg also reported on 21st March that Turkish citizens bought 4 billion dollars as the double-digit inflation in the Turkish market reduced the value of the Turkish lira.

The Turkish Industry and Business Association (TUSIAD) Chief Economist Zumrut Imamoglu explained that the Eurozone Manufacturing Purchasing Managers Index (PMI) dropped, particularly Germany’s 44,7 rate, signaling a serious contraction. The shrinkage in Germany’s industrial market will have a devastating effect on the Turkish economy, as Berlin is Turkey’s main export market.

Moody’s: Turkey’s fragility risk increases as the Lira loses value

The post Turkish lira continues to plummet over Golan Heights tensions  appeared first on IPA NEWS.

from IPA NEWS https://ipa.news/2019/03/25/turkish-lira-continues-to-plummet-over-golan-heights-tensions/