Turkish lira plunges to record low after US announces sanctions

President
Donald Trump, accompanied by Turkish President Recep Tayyip
Erdogan, speaks in the Roosevelt Room of the White House in
Washington Tuesday, May 16, 2017.
Evan
Vucci/AP

Turkey’s currency plummeted to a record low against the dollar
Wednesday after the Trump administration said it plans to impose
sanctions on its NATO ally for failing to release a detained
American pastor who has been imprisoned in the country for nearly
two years. 

The lira fell
more than 1.7%, past the key level of 5 versus the dollar at 2
p.m. ET. It put in a low of 5.0157 per dollar about 30 minutes
prior. 

The Treasury Department will place sanctions on Turkey’s minister
of justice and minister of interior, White House Press Secretary
Sarah Sanders confirmed at a press briefing.

Sanders said the officials played “leading roles” in the arrest
and detention of 50-year-old Andrew Brunson. The Turkish
government arrested Brunson in Izmir in 2016 for allegedly aiding
a failed military coup, accusations the pastor denies.

The lira has shed nearly a third of its value against the dollar
this year. It has faced mounting pressure following the June
reelection of President Recep Tayyip Erdogan, who
grabbed newly-granted executive
powers in the historic political change.

Erdogan has signaled he will wield more influence over the
country’s central bank in his term. The self-proclaimed “enemy of
interest-rates” has pushed for unorthodox policies like cutting
borrowing costs amid accelerating inflation. 

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