Lira falls to four-month low due to Iraqi unrest

ISTANBUL - Reuters

Turkey’s lira slipped to its weakest since March 31 on Aug. 8 as investors fled to safe havens unnerved by the prospect of U.S. air strikes in neighboring Iraq, two days ahead of Turkey’s first direct presidential polls. This was hours before the U.S. hit Iraq targets on Aug. 8.

Thousands of Iraqis, most of them ethnic Yazidis, have fled to the Turkish border. The lira reached 2.1880 against the dollar and stood at 2.1778 by early on Aug. 8 compared to 2.1638 late on a day earlier. Then  it fell to 2.1540. Turkish citizens are set to go to the polls on Sunday to elect their president for the first time.

Riskier assets such as Turkish equities also suffered as investors worried that a deteriorating relationship between Russia and the West could sap global growth, after Moscow imposed a one year ban on meat, fish, dairy, fruit and vegetables from the United States, the European Union, Canada, Australia and Norway. The benchmark 10-year government bond yield fell to 9.4 percent from 9.46 percent at Aug. 7 close.