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Turkish lira slips to one-month low on Syria operation concerns

October 7, 2019 at 6:02 pm

Turkish lira, 7 August 2018 [Twitter]

Turkey’s lira slid to its lowest level against the dollar in more than a month on Monday after the White House said Ankara would soon launch unilateral military operations in northeast Syria, reports Reuters.

Investors have been closely watching tense ties between Ankara and Washington in recent months, with the NATO allies at odds over a range of issues, including policy differences in Syria and Turkey’s purchase of Russian missile defence systems.

Turkey has repeatedly threatened to carry out an incursion against the US-backed Kurdish YPG militia in northeast Syria, accusing the United States of stalling efforts to establish a “safe zone” there along the Turkish border.

Following a phone call between presidents Tayyip Erdogan and Donald Trump, the White House said on Sunday US forces would not support Turkey’s incursion and would leave the area.

READ: Turkey set to invade Syria as the US gives blessing, withdraws troops

The lira declined about 1.5%, trading at 5.7880 at 1502 GMT, after closing at 5.7000 on Friday. Earlier, it slipped as far as 5.7970, its weakest level since September 3.

“While the statement from the United States gives green light to the military operation in Syria that Turkey has mentioned for a long time, it leaves many question marks regarding how the process will develop,” said a forex trader, who did not want to be named.

Turkey’s lira lost nearly 30% against the dollar last year, over concerns about political interference with monetary policy, as well as a deterioration in ties between Washington and Ankara. It is down about 8% this year.

Turkey’s BIST100 main share index was down 0.09%, while the banking index declined 1.07%.