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Saturday, April 17, 2021

Turkish Lira Drops to Eight Against U.S. Dollar

Turkish currency Lira dropped to a new record low of eight against the U.S. dollar last Oct. 26 amid growing tensions with North Atlantic Treaty Organization allies.

Turkish currency Lira dropped to a new record low of eight against the U.S. dollar last Oct. 26 amid growing tensions with North Atlantic Treaty Organization allies.

Lira has lost 26% of its value this year as Turkish President Recep Tayyip Erdogan called for a boycott of French products due to French President Emmanuel Macron’s remarks on Islam, which has sparked protests from Islamic countries, including Pakistan and Syria.

Macron earlier this month said that Islam was in a crisis and that the French government would “intensify its fight against radical Islamism.”

Erdogan said that Macron “needs mental treatment” and other senior Turkish officials also launched a series of verbal attacks on European leaders.

Erdogan also dared the U.S. to follow through with its threat of imposing sanctions.

“You don’t realize who you are dealing with. Whatever your sanctions are, don’t be late with them,” Erdogan stated in a speech last Oct. 25.

The U.S. has threatened to impose the sanctions due to Turkey’s role in the Nagorno-Karabakh conflict and its purchase of a Russian S-400 missile system.

Erdogan confirmed last Oct. 23 that his country tested the missile system.

Turkey also faces tensions with the European Union due to its gas exploration in disputed eastern Mediterranean waters.

Turkish Central Bank also refused to raise its key interest rate, disappointing investors, and instead raised the cost of funding, which market analysts have called “stealth tightening.”

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