Record Low For Turkish Lira Due to Geopolitical Concerns

The Turkish lira hit a record low against the dollar on Wednesday, influenced by investor concerns about possible US sanctions, strained relations with the European Union and the ongoing conflict in the Caucasus.

The currency has lost 24% of its value this year due to concerns about dwindling foreign exchange reserves at the central bank, costly interventions in the exchange market and geopolitical problems.

The lira hit a fresh low of 7.8850 against the US currency, weakening its price from the previous close of 7.8050. By 1232 GMT, the rate was 7.8800.

Concern over possible US sanctions was renewed after Bloomberg reported on Tuesday that Ankara would soon begin testing the Russian S-400 air defense system.

Meanwhile, tensions with the European Union appeared to escalate after President Recep Tayyip Erdogan said on Tuesday that the decisions of the EU summit last week regarding disputes including maritime rights in the eastern Mediterranean were not sufficient to resolve the differences.