ISTANBUL: The Turkish lira traded steady against the dollar on Monday, showing no reaction to Friday night’s moves by Moody’s and Standard & Poor’s ratings agencies to cut Turkey’s sovereign credit ratings deeper into “junk” territory.
The lira stood at 6.01 at 0525 GMT, unchanged from Friday’s close, and has lost 37 per cent of its value against the US currency this year as investors fret about President Tayyip Erdogan’s influence over monetary policy.
Turkish markets were set to begin a public holiday from midday lasting until the end of the week.
The lira’s slide has deepened amid a bitter row between Ankara and Washington over the trial of a US pastor in Turkey. A court on Friday rejected his appeal for release, drawing a stiff rebuke from President Donald Trump, who said the United States would not take the detention “sitting down.”
On Friday, after each downgrading Turkey by one notch, S&P said it expected a recession next year while Moody’s said a weakening of Turkey’s public institutions had made policymaking less predictable.
Fitch Ratings had earlier said the absence of an orthodox monetary policy response to the lira’s fall and the rhetoric of Turkish authorities had “increased the difficulty of restoring economic stability and sustainability.” — Reuters
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