Duty-free access could impact $1.7 bln of Turkish imports, Iira hits record low
The Turkish lira hit record lows on Monday after the Trump administration said it was reviewing Turkey's duty-free access to the U.S. market, a move that could affect $1.7 billion of Turkish exports.
The U.S. Trade Representative's (USTR) review, announced on Friday, came after Ankara imposed retaliatory tariffs on U.S. goods in response to American tariffs on steel and aluminium.
The currency has lost 27 percent of its value this year, battered primarily by concerns about President Tayyip Erdogan's drive for greater control over monetary policy. On Monday, it fell more than 3 percent to a record low of 5.27 against the dollar.
"They should be doing more to support the lira, but in my view this will continue for a while longer and the lira will take another beating here."
VEHICLE PARTS, JEWELLERY
The U.S. Trade Representative's office said the review could affect $1.66 billion worth of Turkish imports into the United States that benefited from the Generalised System of Preferences programme last year. They included motor vehicles and parts, jewellery, precious metals and stone products.
It was unclear whether any large, listed Turkish firms would be hit. Auto parts suppliers tend to be smaller, unlisted companies. Istanbul's main index fell 1.5 percent.
Data from the U.S. International Trade Commission showed that the biggest beneficiary of the duty-free programme were auto and auto parts makers, with exports of nearly $250 million last year. That was followed by precious stones and metals, at nearly $210 million.
A USTR spokeswoman said the review was unrelated to the case of Andrew Brunson, an American evangelical pastor who has lived in Turkey for more than two decades and is charged with supporting the group Ankara blames for an attempted coup in 2016.
Relations between the NATO allies have steadily worsened, strained by differences on Syria policy and over Brunson's trial, exacerbating the sell-off in the lira.
The central bank said its move on the reserve requirements would free up $2.2 billion in liquidity for banks. The central bank could be expected to take similar moves ahead of its next policy meeting on Sept. 13, one forex banker said.
Washington last week imposed sanctions on Erdogan's justice minister and interior ministers, saying they played leading roles in organisations responsible for Brunson's arrest.
"For a meaningful recovery in the lira, we're going to have to watch the news flow," said another Istanbul-based banker, who declined to be identified.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)