US sanctions cause a downward shift on Turkey’s currency, Lira

The Turkish currency,Lira is sliding drastically following sanctions on Turkey by US President, Donald Trump.

The record-low plunge has raised concerns as foreign investors feel unsecured with the new situations.

The sanctions have caused an alarming drop of about 14 per cent against US dollar recently.

In New York for instance, some days ago a dollar was worth 6.4275 lira but due to the sanctions, a dollar is now 6.8217 lira.

Earlier on Sunday 12th and Monday 13th August 2018, the exchange rate of a dollar was at 7.1310 lira in Asia.

Experts share the opinion that the drop could prolong to an economic recess in Turkey.

For the records, Turkey’s stock market has fallen by 17 per cent while government’s borrowing cost has risen to 18 per cent.

On Monday 13th August 2018, the Turkish Central Bank made policy moves. It pledged to supply all the liquidity the banks need.

The financial situation is unlikely to affect global markets, experts say.

This new twist in turkey’s currency crisis was sparked by a declaration by President Donald Trump to impose fresh sanctions on the NATO country.

In a tweet, Mr. Trump vowed to double tariffs on steel and aluminium, adding that US-Turkey relations “are not good at this time.”

President Trump’s decision follows Turkey’s refusal to extradite a US pastor, Andrew Brunson.

Reports put it that, Pastor Brunson, who has been in detention in Turkey for nearly two years, is accused of links to the outlawed Kurdistan Workers’ Party and the Gulenist movement .

The US on her part has refused to extradite Fethullah Gulen, head of the Gulenist movement, to Turkey.

In response to this, Turkish President Tayyip Erdogan accused the US of trying to stab Turkey in the back.

He said “You act on one side as a strategic partner, but on the other, you fire bullets into the foot of your strategic partner,”

President Erdogan rubbished the sanctions, claiming that his people cannot be tamed with threats. He has urged Turks to sell dollars and buy the lira.

Russia and Iran – two countries who are not on very good terms with the US – are seemingly doing great with Ankara.

Tasha Seidou,(Intern)

 

 

 

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