Turkish lira slips to fresh low amid escalating political tension

ISTANBUL

Berkin Elvan's death on March 11 triggered the biggest demonstrations across the country since last summer's Gezi Park protests. Elvan went to a coma after being hurt by a gas canister during the protests last June. His story gripped the nation and became a symbol of the heavy-handed tactics used by police to reign in the biggest demonstrations against the government in recent years. AFP photo

The Turkish Lira has dropped to a weak 2.25 against the U.S. dollar due to escalating political tension with country-wide protests and a steep slide in global markets.

Amid the intensifying pressure on emerging market currencies against the dollar, the demonstrations held across Turkey, which continued through the night of March 11 to denounce the death of 15-year-old Berkin Elvan. Elvan’s death, which came after he had spent 269 days in a coma induced by an injury inflicted from police violence during the Gezi Park protests, fuelled tension in the already shaky politics of the country.

The lira, which was slightly below 2.22 against the dollar at the markets’ closure time, had started to rise during the early hours of the night.

After touching its lowest level of five weeks at 2.26, the lira/dollar ratio stabilized at around 2.247 in the morning despite a slight pick-up.

Investors and speculators have sold off emerging market assets since the U.S. Federal Reserve made clear late last year that it would gradually taper its massive monthly bond purchase program, which up until then had been propping the rate up.

The lira has become one of the hardest-hit currencies, as weak current account deficits and domestic politics rattled the exchange after a graft probe rocked the government and made it much more vulnerable to a low liquidity environment.