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The Turkish lira led losses among major currencies after the United States said it would impose "significant sanctions" if the nation did not release American pastor Andrew Brunson. an Associated Press report that US Vice President Mike Pence has threatened sanctions unless Brunson is released. The read had received some relief yesterday when Turkey, NATO's ally in the United States, decided to place Brunson under house arrest after almost two years in prison. Pence said that if the change of status was welcome, it was insufficient.
Pence warns US Turkey against sanctions if the pastor is not released
The stalemate is an undesirable complication for Turkey at a time when the nation is struggling with stress financial which includes the acceleration of inflation, a growing current account deficit and the perception of investors that the central bank is not doing enough to support the lira. The currency is the worst performance of the year against the dollar after the Argentine peso, which has weakened by almost 22%.
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per dollar from 11:15 in New York. The Borsa Istanbul 100 index wiped out earlier gains, as the Turkish lender sank 3.2%, following the 12% rise recorded yesterday. The iShares MSCI Turkey ETF fell 4% before making gains.
<h3 class = "canvas-atom canvas-text Mb (1.0em) Mo (0) – sm Mt (0.8em) – sm" type = "text" content = "Analysts and traders say :
"data-reactid =" 28 "Here's what analysts and traders say:
Cristian Maggio, Head of Emerging Markets Strategy for TD Securities London
- " I think the United States are quite frustrated by the behavior of the Turkish government to keep foreign citizens ransomed for political reasons.I think Turkey should listen to the last call before sanctions are really applied, it's negative so far, I think. "
Nigel Rendell, senior analyst at Medley Global Advisors in London
- " Without a doubt, a negative impact on Turkey. "This kind of" punch diplomacy "by VP Pence only makes a difference. aggravate the conflict surrounding Brunson. "
- " Given that Brunson has just been transfigured From prison to house arrest, a softer and gentler approach would be the best way to play. The immediate liquidation of the TRY highlights the risks for Turkey of strained relations with the United States "
Delphine Arrighi, portfolio manager at Old Mutual Global Investors in London
- " I think the headlines on the l 39 case gave yesterday "
- " Today, they could show that they are even more tense than expected and that they could add another layer of uncertainty for Turkish assets in addition to an already very uncertain economic outlook.
Win Thin, Brown Brothers Harriman & Co. Chief Strategist for Emerging Markets in New York.
- "This pastor was released from prison and placed under house arrest, which led some to believe that US-Turkish relations were improving."
- "Vice President Pence plays hard here. I think Turkey hoped that moving the pastor under house arrest would ease tensions with the United States, but this is clearly not the case. "
More information on Bloomberg.com
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