Turkish lira hits new low after deadly PKK attack

ISTANBUL - Reuters

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The Turkish Lira hit new lows against the U.S. dollar early Sept. 7, due to concern over Turkey’s worsening security situation, after Kurdish militants carried out one of their deadliest bomb attacks on Turkish troops in years.

At 10:33 a.m., the lira stood at 3.0269 against the U.S. currency, after touching a low of 3.0475 overnight.

“The currency fell to record lows overnight due to an outlawed Kurdish Workers’ Party (PKK) ambush yesterday,” a note from Turkey-based Deniz Invest said.

Equities fell on the back of the lira’s sharp decline, with the main Istanbul stock index falling. 

Analysts were also looking ahead to Turkish industrial output data for July, due to be released on Sept. 8, as well as July’s balance of payments and GDP data for the second quarter, out this week.

“Economic growth has been faster than what we initially anticipated in the year to date,” said Deniz Çiçek, economist at Finansbank, in a note.

He added, “Looking ahead, growth may slow down substantially, though, because of the prolonged uncertainties and resulting financial instability.” 

Emerging market stocks already tumbled to the lowest in almost two weeks on Sept. 7, with many Asian bourses suffering steep losses, dragged down by another sharp fall in Chinese mainland shares while currencies across the asset class chalked up losses.