Turkish lira falls more than 5 percent against the dollar

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UNITED STATES (VOP TODAY NEWS) — The Turkish lira fell more than 5 percent against the US dollar on Friday, its biggest one-day drop since a currency crisis gripped last August, raising fears that the Turks are increasing their foreign exchange purchases amid deteriorating relations With the United States.

The lira closed at 5.7549 against the dollar, the lowest close since October and 5.3 percent below the previous close of 5.4650.

The lira lost about 30 percent of its value against the dollar last year as investors worried about the central bank’s ability to curb inflation in the face of calls from Turkish President Recep Tayyip Erdogan to cut borrowing costs.

Since the crisis, the deposits of Turkish individuals have risen in foreign currency and hit a record level in the week ending March 15, indicating a reluctance on the local currency.

The pound fell on Friday when Erdogan said US President Donald Trump’s move to recognize Israeli sovereignty over the Golan Heights, captured by Israel from Syria in the 1967 Middle East war, had pushed the region to the brink of a new crisis.

Erdogan’s comments renewed concern over a possible deterioration in relations between the two NATO allies already strained over Turkey’s acquisition of Russian S-400 missile defense systems.

A central bank official told Reuters on Friday that a recent fall in the bank’s foreign exchange reserves resulted from foreign exchange sales totaling $ 5.33 billion to energy importers and external debt repayments.

The official added that the decline in reserves was not unusual and that the central bank maintains a policy to increase reserves.

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