The Turkish lira hit fresh lows today against the dollar on reports that Washington is prepared to apply sanctions on entities and individual within Recep Tayyip Erdogan’s government for imprisoning and using American Pastor Andrew Brunson, among others, as bargaining chips.
Following the news, the lira lost close to 2.0% of its value in a matter of hours. At press time, the USD/TRY currency pair is trading close to the 5.01 level - a new all-time low for the Turkish currency.
While the Turkish lira has been losing ground against the dollar since the start of the year, today's losses are quite significant for currency traders and market participants as the unexpected news pushed the USD/TRY pair through the psychological barrier at 5.00:
According to unnamed Bloomberg sources, the U.S. government is making use of the Global Magnitsky Act of 2016, which allows for selective targeting of corrupt foreign officials.
The U.S. government also used the Magnitsky Act against Russian President Vladimir Putin, and individuals close to him, in April of this year.
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