June 1, 2023

The Turkish lira reached in early trading today, Monday, a new record low, recording 18.85 against the dollar, as the Turkish currency is under pressure due to the strength of the dollar and geopolitical risks.

Emerging market currencies came under significant pressure after the dollar rose sharply on Friday in the wake of a strong US jobs report, suggesting that the Federal Reserve may stay on the tightening path for a while longer.

Adding to the pressure were signs that the United States would push for tougher sanctions enforcement policies after Washington warned Ankara against exporting chemicals, chips and other products to Russia that Moscow could use in its war in Ukraine.

The markets are also anticipating the consequences of the earthquake that struck central Turkey and northwestern Syria today, Monday, with a magnitude of 7.8, and has so far caused hundreds of deaths and injuries, with buildings collapsing across the region.

And by 07:00 GMT, the lira compensated for its losses and returned to trading at a stable level.

The last time the Turkish lira reached a record low was on December 26, when it fell to 18.844 against the dollar.

The currency has lost about 1% of its value since the beginning of the year.

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