Lira weakens to new low amid debates over referendum, Mosul

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The Turkish lira dropped to a record low against the US dollar as debates over a shift from a parliamentary system to a presidential system of governance as well as Turkey’s bid to participate in the US-backed Mosul operation against the Islamic State in Iraq and the Levant (ISIL) rattled investors.

The lira started the week at 3.09 to the dollar, but the currency weakened to as low as 3.1140 against the greenback after Prime Minister Binali Yıldırım said on Tuesday that his Justice and Development Party (AKP) would try to ensure that a referendum on Turkey’s switch to an executive presidency is held as soon as possible.

 

Yıldırım also said Turkish jets are taking part in the Mosul operation, and later that day Defense Minister Fikri Işık said Turkey had reached an agreement with “coalition forces” on the participation of the Turkish air forces in the Mosul operation

 

Turkey’s central bank is expected to maintain its unorthodox policy of cutting interest rates further at a Monetary Policy Committee (PPK) meeting on Thursday.

 

The lira has lost 6 percent of its value since the start of the year.

 

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