Turkish lira nears record low against euro amid EU sanction fears

The Turkish lira dropped towards a record low against the euro on Monday, amid state interventions that have tied it to the dollar and concerns of EU sanctions against Ankara over drilling plans in the East Mediterranean.

The currency has fallen about 7 percent against the euro in two months while virtually flat-lining against the U.S. dollar, Reuters reported.

The slide coincides with a move by Turkey's central bank and state banks to sell tens of billions of dollars to stabilise the U.S. exchange rate.

Turkish currency has slipped to 8.0488 against the euro by 1219 GMT, from a close of 7.9733 on Friday as the euro continues to rise to its strongest level against the dollar in nearly two years, it said. 

Earlier on Monday, lira was at 8.0556, its weakest since the height of Turkey's currency crisis in August 2018, when a diplomatic row with Washington sent it on a downward spiral to as low as 8.2029.

Turkey's deployment of vessels to search for oil and gas off Cyprus has stoked tensions in the region, where a number of countries are vying for the rights to hydrocarbon resources, prompting the EU to hit Ankara with sanctions. 

The bloc's foreign ministers have agreed to bulk up the existing sanctions framework after France demanded action over  what is called Ankara's violations in the region.