Turkey takes action in bid to curb currency crisis

Turkish liraImage copyright
Reuters

Turkey’s central bank said it was ready to take “all necessary measures” to ensure financial stability after the collapse of the lira.

It has vowed to provide banks with “all the liquidity the banks need”.

The measures come after the Turkish lira hit record lows against the dollar amid a widening diplomatic spat with the United States.

Stock markets in Asia fell on Monday as investor concern over Turkey’s currency crisis mounted.

The latest blow came on Friday, when US President Donald Trump said he had approved the doubling of tariffs on Turkish steel and aluminium.

What is happening on the markets?

Before the new measures were announced, Japan’s Nikkei 225 had fallen almost 2% in late trading.

Experts have blamed the sharp slide in the lira on fears the country is descending into an economic crisis.

Hong Kong’s Hang Seng index was down almost 1.6% in afternoon trade, while the Shanghai Composite fell 1.7%.

In Australia, the benchmark S&P/ASX 200 index had lost 0.5%, while South Korea’s Kospi index was down 1.8%.

Investors globally are worried about the damage spreading and have been prompted to sell riskier assets – including Asian stocks and emerging market currencies.

Analysts said investors were now looking for safe havens in the form of the yen as well as the US dollar.

Turkey takes action in bid to curb currency crisis

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