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Monday 11 November 2019
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Turkish Markets Get a Fresh Dent as Putin Doubts Syria Operation

ForexOct 11, 2019 09:03AM ET

(Bloomberg) — The lira fell with Turkish government bonds as Russian President Vladimir Putin expressed concern over Ankara’s military campaign into northeast Syria, compounding a volatile week marked by an international backlash to the Turkish incursion.

The currency fell to a session low just past 5.88 per dollar after Putin said he wasn’t sure if the Turkish army would be able to quickly take the situation under control, according to comments carried by Interfax. The yield on the two-year government note jumped 22 basis points to 15.05%, nearing a high touched earlier this week.

The losses come after what traders described as aggressive dollar sales earlier in the week by state banks to steady the lira, which has declined almost 3% this week. It slumped to as low as 5.8982 on Thursday, the weakest level since late August.

Turkish troops began a major incursion into northeastern Syria on Wednesday to combat American-backed Kurdish forces, prompting the U.S. congress to threaten to sanction Turkey. Penalties will also be debated next week at the European Union leaders’ meeting, France’s EU Affairs Minister Amelie de Montchalin said on Friday.

To soften the blow, state lenders sold at least $3.5 billion of foreign currency to support the lira this week, according to three people with knowledge of matter who asked not be named because the information isn’t public. The banks sold around $1.5 billion on Thursday alone, the people said.

The lira was trading 0.3% weaker at 5.8542 per dollar as of 2:56 p.m. in Istanbul after touching a session low of 5.8828. It was the only emerging-market currency to weaken against the dollar on Friday.

Turkish Markets Get a Fresh Dent as Putin Doubts Syria Operation

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