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Hope of improved US-Turkey ties helps lira rise against dollar

August 7, 2018 at 9:48 am

Turkish lira, 7 August 2018 [Twitter]

The Turkish lira gained some two per cent early today, recovering from a record low, after broadcaster CNN Turk reported Turkish officials would go to Washington to discuss strained relations.

Yesterday, the lira fell as much as six per cent, putting it on track for its biggest one-day fall in a decade, before it pared losses. The depth of the sell-off reflects growing concern about monetary policy under President Tayyip Erdogan and worsening ties with Washington.

A delegation of Turkish officials will head to Washington in two days to discuss an ongoing row between the two NATO allies, broadcaster CNN Turk reported overnight, citing diplomatic sources.

It said Ankara and Washington had reached pre-agreements on certain issues, but it did not elaborate. The US State Department did not respond to a request for comment and Turkish officials were not immediately available for comment.

READ: Turkish lira hits record low after US reviews duty-free access

Relations between the two countries have steadily worsened, strained by differences on Syria policy and over the trial of US pastor Andrew Brunson in Turkey.

Over the weekend, the US Trade Representative said it was reviewing Turkey’s duty-free access to the US market, after Ankara imposed retaliatory tariffs on US goods in response to American tariffs on steel and aluminium. The move could affect $1.7 billion of Turkish exports.

The lira has lost more than 27 per cent of its value this year.