Turkish Lira falls amid escalating geopolitical concerns
ISTANBUL
Turkey’s currency has weakened both against the U.S. dollar and the euro, as geopolitical risks escalate over a possible military operation by Turkey in the Afrin region of northern Syria.
The lira slumped as much as 1.5 percent against the dollar to 3.8034 early on Jan. 15, although the dollar index was down 0.4 percent to its lowest in more than three years.
The lira-dollar index slid further to 3.8324 early on Jan. 16, before regressing a bit to 3.82 in the afternoon.
The lira also plunged to 4.6639 on Jan. 15 from 4.5656 on Jan. 12. The index saw 4.6928 early on Jan. 16, before sliding back to 4.6509 in the afternoon of Jan. 16.
The Turkish currency slumped to record low levels against both currencies back in November 2017.
The country’s main stock exchange also closed the Jan. 15 session at 112,159 points with a 2.17 percent decline from the previous session after the Syria developments broke out.
The markets have been closely following the announcements by Turkish Foreign Minister Mevlüt Çavuşoğlu along with his U.S. counterpart Rex Tillerson late on Jan. 16 in Canada, according to analysts.
Eyes have also been on the Central Bank’s rate decision, which will be made this week, and a possible rating decision by Fitch Ratings on Jan. 19, they also noted.
Meanwhile, amongst the biggest gainers was the South African rand, which rose as much as 0.8 percent on Jan. 16, breaking through a technical barrier to hit a 2.5-year high against the dollar.
Investors have been eyeing reports that the ruling African National Congress party is preparing to discuss whether President Jacob Zuma should step down as head of state.
China’s Yuan was also still trading near its strongest in more than two years after surging on Jan. 15, underpinned by the Bundesbank’s decision to include the Yuan in its reserves.
Similar to the lira, the Indian rupee also fell 0.9 percent to a two-week low, hit by higher oil prices.
