IPANEWS

Turkish lira slides after S-400 deliveries start

The Turkish lira weakened as far as to 5.77 to the dollar on Friday after it had emerged that the delivery of the controversial Russian S-400 missile defense system had started.

Starting at 5.6739 in the last trading day of the week, lira lost 1.5 percent of its value and traded at 5.75 to the dollar at 16:57 yesterday.

The lira had earlier firmed as far as 5.65 against the dollar after U.S. Federal Reserve (Fed) President Jerome Powell hinted that the Fed could be cutting interest rates for the first time a decade.

Turkey’s benchmark stock index, the BIST 100 index, which was closed at 99,406 points on Thursday, fell 2.35 percent on Friday to 97,098.34 points.

The banking index was down more than 3.3 percent at 1450 GMT yesterday.

According to yesterday’s data, the yield for the 10-year government bond increased by 1 percent to 17.22. The yield reached to 19.21 percent during the day.

Turkey’s five-year credit default swaps (CDS) rose 0.78 percent to 3 percent and reached 394 basis points.

Turkey’s lira firmed last month after the Federal Reserve signaled possible interest rate cuts later this year but lira slumped more than 3 percent after Turkish President Recep Tayyip Erdogan’s shock decision to sack the country’s central bank governor, Murat Cetinkaya.

The lira has lost its 50 percent values since the last August as Turkey jailed U.S. Pastor Andrew Brunson and Ankara announced that it was going ahead with the purchase of the S-400 Russian missile defense system, which is strongly opposed by the US.

The US has warned Turkey that there would be consequences for Turkey if it proceeded with the S-400 purchase.

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