Turkish Lira recuperates losses after Turkey-US meeting report

ISTANBUL

Turkey’s currency has rebounded on Aug. 7 after it hit a record of 5.42 against the U.S. dollar on Aug. 6, marking the biggest daily drop of 5.5 percent in 10 years.

Lira was traded for 5.26 against the dollar in the early trading, after local reports pointed to a meeting between a Turkish delegation and their American counterparts that will take place in Washington in two days.

The tension between the NATO allies has rose in a couple of issues ranging from the differences in the policies regarding the Syrian conflict to imprisoned U.S. pastor Andrew Brunson, and Turkey’s unmet request for the extradition of U.S. based Islamic preacher Fethullah Gülen who has been accused of masterminding the coup attempt on July 15, 2016 in Turkey.

Washington on Aug. 3 said it was reviewing Turkey’s duty-free access to the U.S. market, a move that could affect $1.7 billion of Turkish exports.

After the announcement triggered a sell-off in Turkish Lira on Aug. 6, the Turkish Central Bank stepped in and loosened the upper limit of banks’ reserve requirements, increasing the liquidity $2.2 billion. However, that did little to prop up the lira, which also hit a record low versus the euro hitting 6.16.

The Turkish currency has lost some 27 percent of its value this year.