Turkish Lira has been facing a decline since July 23 last month, the currency has now plunged even further, a sharp decline in Lira exchange rate shakes the financial markets globally including Britain’s FTSE and New York Stock Exchange NYSE.
Turkish Lira has lost its value by 47.63 percent since July 23, the stock indices are declining from Asia to Europe. The FTSE 100 was down by 0.5 percent, the European STOXX 600 lost 0.3 percent and France’s CAC 40 plunged by 0.2 percent while Germany’s DAX was also down as FTSE 100 to 0.5 percent.
Travel stocks were hit hard by this development TUI posted the worst performance of the British blue-chip index which fell by 4.3 percent. Thomas Cook and EasyJet were dragged 2.4 percent and 1.4 percent respectively.
Several businesses were also down that had trading stakes in Turkey, Domino’s Pizza Turkey fell by 12.1 percent according to Reuters.
CNBC reported that since last Friday Morgan Stanley and Goldman Sachs all dropped by 1 percent, Dow Jones Industrial average also shed 196.09 points amid Lira crisis. The big dip came after Turkish delegation returned from Washington with no apparent progress, as Trump demanded redemption of Andrew Brunson detained by Turkish authorities in 2016 to support a failed coup attempt in Turkey earlier.
Donald Trump threatened Turkey to hit the country with massive sanctions if Andrew Brunson is not released. According to EuroNews, Recep Tayyip Erdogan Turkish President said, there is no financial crisis in Turkey rather “The US is laying a plot against Turkey” a planned attempt to create the financial crisis in the country and Donald Trump is behind that plot.
It is obvious from the disagreement between both countries and Trump’s threats to deal with Turkey. US decision on doubling tariffs on Turkish steel and aluminum also played a critical role in currency devaluation.
Lira started to drop from February gradually but now the currency faces a sharp plunge since July 23. Trump administration has been messing around with several countries including North Korea, and China. The trade war is not over yet with China and Trump has opened up a new wrestling ring for Turkey.