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Mar 22 2019

Turkish lira falls against dollar over Golan Heights tensions

The Turkish lira fell to 5.55 against the dollar on Friday morning, reaching a level last seen in mid-January despite a decision by the Fed this week to limit rate hikes next year.

The lira fell as much as 2.1 percent to 5.5814 per dollar amid signs a fresh rift is growing between Ankara and Washington, the latest in a protracted series of spats that last year led Turkey to a currency crisis.

Turkish President Recep Tayyip Erdoğan has vowed to go ahead with the purchase of Russian S-400 missile defence systems, a move that could lead to sanctions from Washington.

On Friday, Erdoğan condemned U.S. President Donald Trump for legitimising Israel’s occupation of the Golan Heights in a tweet the previous day.

“We will never allow, and cannot allow, the legitimisation of the occupation of Golan Heights. In this fragile period, we have to be active on issues that directly concerns us,” the Turkish president said.

Turkish dollar bonds plunged after Erdoğan’s comments, “with the 2043 issue tumbling to its lowest since mid-January, according to Tradeweb data,” Reuters reported.