The Turkish lira is suffering from the American pastor detainment scandal. The rate fell for the sixth day in a row, marking the longest period of losses in three months. The yield on 10-year bonds reached a record level. According to traders, in addition to US sanctions against the Turkish ministers, the situation is aggravated by the lack of liquidity in the market and the incredible power of the dollar.
Last weekend, Turkish President Recep Tayyip Erdogan promised to respond to the measures imposed by the US authorities. His remarks were as cautious as possible, analysts of Global Securities in Istanbul said. This indicates a possible breakthrough in one of the most difficult diplomatic crises between the states.
The lira can recover quite strongly and quickly in case of the warming of relations, experts predict.
Meanwhile, the Turkish currency is under pressure; US President Donald Trump promises to expand sanctions against Turkey if the US pastor is not released.
This year, the lira has lost more than 26% of the value in pair with the dollar. This makes it difficult for companies to repay loans in foreign currency, stimulates inflation and puts pressure on the central bank, which is likely to continue raising rates. The next meeting of the Turkish regulator is scheduled for September 13.