The Turkish lira reached a record low on Monday, trading at more than 8 against the US dollar for the first time, passing a key psychological threshold for investors.
In Asian markets, the exchange rate started the day with a level of 7.98 lira against the dollar, before arriving at 8.05. The rate against the euro started at 9.46 and reached a new record, exceeding 9.5.
The new low against the US dollar carries symbolic significance for the Turkish public, the business community, and policy makers. It comes after President Recep Tayyip Erdoğan criticised the US for hitting Ankara with sanctions on Sunday.
Washington has repeatedly threatened to impose sanctions on Turkey for its purchase of a Russian-made S-400 air defence system. “You don’t realize who you are dealing with”, said Erdoğan in his speech on Sunday, in the Malatya province of Turkey. “Whatever your sanctions are, don’t be late with them”, he added.
Tensions have increased between Turkey and the EU over energy exploration initiatives in the Eastern Mediterranean and the escalation of the Azerbaijan-Armenia conflict. War policies implemented by the AKP-MHP bloc are also one of the biggest reasons for the depreciation of the lira.
The lira has has been steadily losing value in recent years and is among the currencies that has most sharply declined against the dollar this year. It has depreciated more than 25 percent against the US dollar and nearly 30 percent against the euro since the beginning of the year.