Turkish lira drops as coronavirus prompts flight from riskier assets
The Turkish lira led a decline in Europe’s emerging market currencies as investors shunned riskier assets due to a spread in the coronavirus.
The lira dropped 0.9 percent to 6.14 per dollar at 11:18 a.m. in Istanbul, extending the lowest levels in normal trading since May last year. It has weakened about 3 percent this year.
Turkey closed its border with Iran at the weekend to contain the potential spread of the coronavirus after Tehran reported 43 cases of the disease. The lira is also weakening due to investor unease about fighting between Turkish and Syrian forces in Syria’s province of Idlib, threatening to draw in Russia, which backs the government of President Bashar Assad.
A sixteenth Turkish soldier died in Idlib on Saturday.
Turkey’s main BIST-100 index of shares fell 2.1 percent to 114,433 points. Listed bank Garanti BBVA, a favoured stock among foreign investors, slumped 3.4 percent to 10.71 liras a share.
Turkey has been using state-run banks to intervene in the currency market and support the lira, which lost 11 percent of its value last year. The lira slumped 28 percent against the dollar in 2018 after concerns about an overheating economy and a political spat with the United States sparked a currency crisis.
The Hungarian forint, Polish zloty and Ukrainian hryvnia also declined.