Turkish Lira again hits record lows amid political uncertainties

ISTANBUL

AFP photo

The Turkish Lira continued to plunge to record lows on Aug. 14, as the country braces for new elections after failed coalition talks between the Justice and Development Party (AKP) and the Republican People’s Party (CHP) amid escalating clashes with Kurdish militants and the Islamic State of Iraq and the Levant (ISIL). 

The Turkish Lira hit 2.84 against the U.S. dollar on the morning of Aug. 14, a record low, although it rebounded to around 2.82 after a series of measures taken by the Central Bank, which again lowered the cost of dollar borrowing in a bid to stem the collapse.

Having lost around 17 percent in value this year, the lira is one of the two worst performing emerging market currencies along with the Brazilian currency, according to Reuters data.  

Coalition talks between the AKP and the CHP ended in failure on Aug. 13, with the AKP leader admitting that their counterpart had refused their proposal to form a short-term coalition government aimed at carrying the country to an early election. He suggested that Turkey should hold a fresh election as soon as possible, describing such a prospect as a “vaccine” for the country. 

“A conviction that there are no grounds to strike a government partnership has been arrived at,” Prime Minister Ahmet Davutoğlu told reporters in a press conference after a half-hour meeting with CHP leader Kemal Kılıçdaroğlu.

“There is now a strong possibility of appealing to the national will,” Davutoğlu added, in reference to new polls, following the inconclusive June 7 election.

Davutoğlu will meet Nationalist Movement Party (MHP) head Devlet Bahçeli on Aug. 17, an MHP deputy was quoted as saying by Reuters.