The Turkish lira collapsed against the dollar today, falling by as much as 25% before slightly recovering. For the week, analysts are predicting that the lira will be 20% less than it was the previous week against the US dollar.
A story in the Financial Times triggered the falloff; the paper said that the ECB is examining the Turkish exposure to several European banks, including UniCredit, NP Paribas and Banco Bilbao Vizcaya Argentina.
Turkish President, Recep Erdogen remained defiant saying: “don’t forget, if they have their dollars, we have our people, our God.” After declaring economic war, Erdogen wants Turkish citizens to stop using dollars and avoid buying gold. PS usually saying something like this incentives people to do the opposite.
In addition to the lira the South African rand hit a six-week low against the dollar, falling to close to R14:$1, while the Russian ruble fell to a two-year low 67.09:$1 on US sanctions against Russia. The US dollar is up almost 6% against the ruble this months and nearly 14% since the beginning of 2018.