Political and Economic Concerns Smash Turkish Lira

Turkey’s currency, the lira, hit an all-time low of 3.7790 against the U.S. dollar in early trade on Tuesday, breaking previous record lows plumbed during Monday’s session.

The currency, which lost 17 percent against the U.S. dollar during 2016 to claim the title of the second-worst performing emerging market (EM) currency for the year after the Argentine peso, saw its woes increase further following the publication of a critical note from credit rating agency Moody’s on Monday.

The research claimed that a sharp rise in security risks in recent years was driving a deterioration in the country’s economic situation and would likely cause a spike in the volume of non-performing loans held by Turkish banks.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.