Turkey’s lira plunged to a record as the country’s latest diplomatic row with the US and other foreign governments gave traders a potential reason to sell the crippling currency.
- The lira rebounded nearly 2.5% in early Asian trading amidst thin liquidity, reaching a new low for the third day. The currency was 1.5% lower at 9.7509 per dollar at 10:48 am in Istanbul.
- The currency faced a fresh selling after President Recep Tayyip Erdogan stated on Saturday that the ambassadors of 10 nations were not welcome after they pushed for the release of a key government critic.
- Ehsan Khoman, head of emerging market research for Europe, Middle East, and Africa at MUFG Bank in Dubai stated that the potential “personae non gratae declaration” mounts the increasingly severe economic challenges facing the country.
- Khoman further stated that lower investor confidence could trigger “a precipitous and disorderly lira depreciation.”
Erdogan has for a long time sought to present himself as the nation’s bulwark against hostile foreign powers to appease the nationalist voters.
TRYUSD down -0.81%