The dollar fetched as much as 3.7694 lira on Monday during Asian trade, compared with around 3.616 lira on Friday — a move of over 4 percent. That’s not too far off from the lira’s record low of around 3.9407 per dollar, touched in January. The dollar was at 3.7225 lira at 8:45 a.m. HK/SIN.
The visa-service suspensions were “a tit for tat, if you like, reaction. That sparked concerns over the stability of the lira,” Rodrigo Catril, currency strategist at National Australia Bank, said on Monday. “Turkey has a huge current account deficit and therefore a huge need for funding.”
A country develops a current account deficit when the value of its imports exceeds its exports, leaving a deficit that usually must be financed by borrowing.
Turkey’s current account deficits averaged $4.75 billion a month for the last three months, the widest since 2013, according to data from Macquarie.
The decline came in the wake of rising tensions between the two NATO members.
On Sunday, the U.S. Embassy in the Turkish capital said on Twitter that “recent events” had forced Washington to reassess Ankara’s commitment to the security of the U.S. mission and its personnel. All non-immigrant visa services had been suspended “effective immediately,” the embassy added.