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Business

AFP
May 7, 2020

Turkey lira hits record low against US dollar

Business

AFP
Thu, May 07, 2020
AFP/Yasin Akgul/Files

ANKARA: Turkey's lira on Thursday hit a record low against the US dollar as traders worried over the impact of the coronavirus crisis on the Turkish economy and Ankara's policies.

The lira was trading at 7.23 to the dollar, down 0.6% just before 10am GMT, after reaching a record low of 7.24 earlier.

This took the Turkish currency into territory last seen during the 2018 currency crisis when there were severe strains with the United States.

The lira has lost over 17% against the greenback since the start of 2020 amid concerns over the country's cash reserves being depleted to prop up the currency.

But Turkish Finance Minister Berat Albayrak sought to reassure investors in a video conference call on Wednesday, insisting Turkey's reserves were more than adequate.

Turkish President Recep Tayyip Erdogan has rejected the option of asking the International Monetary Fund for help.

Instead the government is hoping for a swap line from the US Federal Reserve, and Albayrak has said Ankara is in contact with other G20 countries about similar moves.

But US ambassador to Turkey David Satterfield last week appeared to pour cold water on Ankara's hopes in an Atlantic Council online event.

"There are certain requirements set by the Open Market Committee of the Fed with respect to potential eligibility," Satterfield said.

"They are financial, monetary requirements and conditions; they are not politically linked," he added.

Turkey's state news agency Anadolu on Wednesday accused financial institutions in London of "manipulative attacks" on the lira.

The agency claimed the move had been timed to coincide with Albayrak's call.

Turkey's banking regulator on Thursday widened the definition of "manipulating and misleading procedures".

It said spreading "wrong or misleading information" would be considered "manipulative" action.