Turkish lira edges up during religious holiday
Turkey’s lira gained in thin trading on the last day of a religious holiday in the country.
The lira rose 0.2 percent to 6.79 per dollar on Tuesday. That pared losses this year to 12 percent.
The lira has strengthened from an all-time low of 7.269 per dollar on March 7, when concerns among investors intensified over the level of the central bank’s foreign currency reserves. Since then, the bank has announced an expanded currency swaps deal with Qatar to the equivalent of $15 billion from a previous $5 billion. Turkey continues talks with other countries on similar agreements.
The currency has also been rising amid a reduction in the number of deaths and infections from the COVID-19 virus. Turkey announced 29 new fatalities on Monday, bringing the death toll to 4,369. It reported 987 new infections, taking that total to 157,814, the ninth highest globally.
The lira faces resistance to further strength at 6.78 per dollar, currency research and analysis company FXWirePro said on Monday, citing technical calculations. On the downside, the lira may weaken to 6.86 per dollar should it break through 6.84, it said.
Investors are also eyeing political tensions between Turkey and the United States over the former’s purchase of S-400 air defence missiles from Russia.
On Monday, Ibrahim Kalın, spokesman for President Recep Tayyip Erdoğan, told France24 television that Turkey was delaying activation of the S-400s because of the COVID-19 virus. “In principle”, Turkey is sticking to its agreement with Russia, but is also prepared to acquire Patriot missile systems from the United States, he said.
U.S. legislation foreseeing sanctions against Turkey for its acquisition of the missiles is currently before Congress.
On Friday, the Turkish Statistical Institute is due to report first quarter data for economic output. The economy may have expanded by 5.4 percent annually in the three months to March, according to the median estimate in a Reuters poll of 14 economists. Estimates ranged between 4.4 percent and 6.4 percent, Reuters said.