Turkey's Lira Drops Due to S-400 Missile Deal

The Turkish lira fell by 1.5 percent at two weeks low as tensions grow between the United States and Turkey.

The depreciation of the Turkish currency came as Ankara insists on purchasing Russian S-400 missile defense system despite US pressure.

Earlier, Turkish Foreign Minister Mouloud Gawish Oglu said that comments by acting US Defense Secretary Patrick Shanahan regarding the suspension of the F-35 fighter jet program would not make Ankara change its decision.

[caption id="attachment_56750" align="aligncenter" width="490"] Russian S-400 air defense system[/caption]

Turkey's insistence on buying the missile defense system could expose it to further US sanctions, pushing the Lira to lose more than 10 percent of its value in a year.

In the meantime, Russia has announced that it will deliver the defense system to Turkey next month.

In the first week of June, Turkey's foreign reserves fell to $138,891 billion from $139,273 billion last February with local elections scheduled to resume in Istanbul later this month.

The central bank decided yesterday to keep the interest rate unchanged at 24 percent.

The lira fell 1.1 percent against the dollar to record 5.8724 lira, the lowest since May 29.