Turkish currency sinks to eight liras to the dollar

Turkish currency sinks to eight liras to the dollar as Erdogan calls for France boycott
2 min read
26 October, 2020
The Turkish lira has sunk even lower as Erdogan calls for a boycott of French goods.
The Turkish lira has continued to sink [Getty]
The Turkish lira sunk to a new low against the dollar on Monday, as President Recep Tayyip Erdogan threatened a new trade war with France.

The Turkish currency weakened to eight liras to the dollar and continued to fall later on Monday as Erdogan called for a boycott of French goods.

It means that the lira has lost a quarter of its value since the end of 2019, which has coincided with a series of foreign policy issues for Turkey - most recently with Erdogan's war-of-words with France.

Erdogan on Monday called for a boycott of French goods after comments made by President Emmanuel Trump regarding Islamism and Islam.

It follows controversy over the depiction of the Prophet Muhammad in French media, with images also projected onto buildings and other public places after the horrific murder of a school teacher.

Other Muslim countries, such as Kuwait, have called for boycotts of French goods, but unlike Turkey they have been generally led by chambers of commerce or businesses rather than public officials.

Erdogan on Monday engaged in the debate, after already saying on the weekend that Macron needed "mental checks" due to his comments on Islam.

"Never give credit to French-labelled goods, don't buy them," Erdogan blasted.

Analysts told The Financial Times that hitting the eight liras to the dollar mark will lead to huge concerns in Turkey, where the government has spent an estimated $134 billion over the past 18 months propping up the currency.  

"It has a psychological effect," said Enver Erkan, an economist told the financial daily, regarding the news.

Turkey also faces US sanctions after it recently tested a Russian-made S-400 missile system and is also engaged in bitter row with Cyprus and Greece over the issue of maritime borders.

These tensions have led Turkey into disagreements with the EU, some European countries, and members of NATO.

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