Turkish lira pulls back from record low, markets rattled

Turkish lira pulls back from record low, markets rattled

Turkish lira pulls back from record low, markets rattled

USA stocks rose in a broad rally on Tuesday after four straight days of losses on a strong set of earnings from retailers and as bank stocks rebounded after the Turkish lira snapped a three-week slide.

On Monday, the central bank announced a series of measures to "provide all the liquidity the banks need" - but offered no hint of a rate increase.

The United States slapped financial sanctions on two Turkish ministers and doubled steel and aluminum tariffs on Turkey over his continued detention.

The report says that ASUS has rushed to reduce risk, quickly selling off its local store of products in Turkey in exchange for USA dollars.

The currency has nosedived over the past week, accelerating a months-long decline that has seen it drop 45 percent this year.

Albayrak said budget discipline would be the most important foundation of Turkey's new economic approach and fiscal rules would be implemented for targeted indicators if necessary.

"The plunge in the lira, which began in May, now looks certain to push the Turkish economy into recession, and it may well trigger a banking crisis", said Andrew Kenningham, chief global economist at Capital Economics. Erdogan asked, referring to the US.

The lira was around 6.55 per dollar Tuesday, up 6 percent from the previous day, when the central bank freed up cash for banks.

President Recep Tayyip Erdogan said Tuesday that Turkey would boycott USA -made electronic products, escalating a feud with the Trump administration that has contributed to the rapid decline of the Turkish currency.

"Contagion risks centre on Spanish, Italian and French banks exposed to Turkish foreign currency debt, as well as Argentina and South Africa", warned analysts at ANZ.

"We, as the Turkish Airlines, stand by our state and our people".

"What you want to see is tight monetary policy, a tight fiscal policy and a recognition that there might be some short-term economic pain - but without it there's just no credibility of promises to restabilize things", said Craig Botham, Emerging Markets Economist at Schroders. On Tuesday, one dollar was worth 7.2 lira.

Brunson is at the center of a diplomatic spat between North Atlantic Treaty Organisation allies Turkey and the United States, which has helped trigger a Turkish currency crisis.

"This is the sign of a clear attack, a challenge", Albayrak said. "I believe the new and important topics will be discussed in this call, otherwise there would not be such an attempt".

"In the absence of bad news, markets will move higher", said Steve Chiavarone, vice president and portfolio manager at Federated Investors in NY.

"The concerns are ongoing in the market but it is possible to mention a limited optimism for the first time in a while", a foreign exchange trader said.

European shares rebounded Tuesday as the Turkish currency firmed, thanks to reassurances from the Central Bank of the Republic of Turkey (CBRT) and the government.

Erdogan has so far rejected such analyses, saying the United States is the main culprit.

White House economic adviser Kevin Hassett said Treasury Secretary Steve Mnuchin was monitoring the financial situation in Turkey "very closely".

Turkish Foreign Minister Mevlut Cavusoglu told reporters that the top US diplomat in Turkey would visit Brunson later Tuesday.

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