Turkish Lira Weakens Following US Sanctions on Ankara

Turkish lira extended losses against the dollar, late Thursday, as US is said to impose sanctions on Turkey over its acquisition of Russian S-400 air defense systems, according to Reuters.

The Turkish lira weakened as far as 7.9290 against the U.S. currency and stood at 7.9175 at 1822 GMT, 1.25% weaker than Wednesday’s close.

Trump administration has been planning to impose sanctions against Turkey over its acquisition of the Russian S-400 missile defense system, according to two people familiar with the matter.

One of the two people claimed that the sanctions would be crafted to be “as mild as possible” to placate Congress while avoiding serious damage to the extensive US-Turkey military relationship.

This move came as Congress works on legislative penalties against Ankara.

U.S. official has spoken on the condition of anonymity, noting that Trump had given aides the blessing for the sanctions.

The Turkish lira weakened as much as 1.4% , as the sanctions could harm a Turkish economy. The economy is struggling with a coronavirus-induced slowdown, double-digit inflation and badly depleted foreign reserves.

A senior Turkish official said sanctions would backfire and hurt ties between the two NATO members.

During their meeting in Brussels, this morning, EU leaders imposed additional sanctions on Turkey for its unilateral actions and provocations.

NATO secretary-general Jens Stoltenberg claimed that Turkey was hosting around four million refugees, which is more than any other NATO ally, asserting that the country had suffered from terrorist attacks

“There are differences, there are disagreements, we need to address them,” Stoltenberg mentioned.

“At the same time, we need to make sure that we realize the importance of Turkey as part of NATO and also as part of the Western family.”