Turkey’s currency crisis gets worse with fresh 11% plunge

Ankara:Turkey’s currency nosedived again Monday with a fresh 11 per cent plunge as fears deepened about the country’s ability to deal with a crisis that has rattled markets around the world.

The Turkish lira dropped 11 per cent against the dollar in morning trading in Asia, reports CNN.

It had plummeted more than 20 per cent last week as a political clash with the US intensified and investors fretted about the Turkish government’s lack of action to tackle the problems plaguing its economy.

The lira’s drop has unsettled global markets, with shares of European banks coming under particular pressure because of concerns over the lenders’ exposure to Turkey.

On Monday, benchmark stock indexes in Tokyo, Hong Kong and Shanghai were all down more than 1.5 per cent in late morning trading.

Turkish President Recep Tayyip Erdogan has dismissed calls for the country to raise interest rates to try to ease the crisis and has lashed out at the US.

“We will not give in,” Erdogan said on Sunday. “If you come at us with your dollars then we will find other ways to do business.”

The lira is now down around 45 per cent against the dollar since the start of the year, making it far harder for Turkish companies to pay back loans they have taken out in the US currency.

Meanwhile, Finance Minister Berat Albayrak said in an interview with Turkish newspaper Hurriyet on Sunday that the government has drafted an economic action plan that it will start implementing on Monday morning, CNN reported.

Albayrak, who is Erdogan’s son-in-law, didn’t specify what the plan would involve.

He said the country’s banks and banking regulator “will take the necessary measures quickly”.