Turkish lira sinks to all-time low amid Washington, Ankara tensions

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

• The lira hit a record low against the dollar on
  Thursday.
• Talks in Washington failed to deescalate tensions
  between the US and Turkey that had arisen over the detention of
  several Americans.
• 
  Watch
  the lira trade in real time here.
  

The Turkish lira hit an all-time low against the US dollar
Thursday after diplomatic talks between Washington and Ankara
appeared to break down.

The lira was down 3% versus the dollar at noon ET. It touched a
record low of 5.5 against the greenback after Turkish officials
returned from meetings with a delegation from the US Treasury and
State Department without any resolution to a conflict over
Turkey’s detention of several Americans.

“The Turkish delegation went to Washington, and there seem to be
no compromises on offer at the moment, and confidence in the
currency remains weak,” said Kit Juckes, the global head of FX
strategy at Societe Generale. 

The Trump administration earlier this month announced sanctions
against Turkey for failing to release Andrew
Brunson, an evangelical pastor who has been detained for nearly
two years. 

The sanctions target Turkey’s minister of justice and
minister of interior, whom the White House said
played “leading roles” in the arrest and detention of 50-year-old
Brunson. He was arrested in Izmir in 2016 for allegedly aiding a
failed military coup — accusations the pastor denies.

The lira had already been under significant pressure, shedding
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.

The Turkish government said it would be announcing a “new
economic plan” this week, but that seemed to do little for the
lira. 

Markets Insider