Turkish lira plunges after US decision to review duty free access

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This picture is taken on April 10, 2018 in Istanbul shows a screen displaying foreign exchange rates against Turkish liras as a man looks to the rates at Istiklal avenue. / AFP PHOTO / OZAN KOSE

The Turkish lira reached a record low against the dollar on Monday after the Trump administration said it was reviewing Turkey’s duty-free access to the US market, a move that could affect some $1.66 billion of Turkish imports, Reuters reported.

The review by the US Trade Representative’s office, announced on Friday, came after Ankara imposed retaliatory tariffs on US goods in response to American tariffs on steel and aluminum.

Relations between the NATO allies have steadily worsened, strained by differences over Syria policy and an escalating row over the trial in Turkey of an American Christian pastor, Andrew Brunson. That friction has exacerbated the sell-off in the lira.

The currency has lost a quarter of its value this year, battered mainly by concerns about President Recep Tayyip Erdoğan’s drive for greater control over monetary policy. On Monday, it touched a record low of 5.19 against the dollar.

The US Trade Representative’s office said the review could affect $1.66 billion worth of Turkish imports into the United States that benefited from the Generalized System of Preferences program last year, including motor vehicles and parts, jewelry, precious metals and stone products.

It was unclear whether any large, listed Turkish firms would be hit by the move. Most auto parts suppliers tend to be smaller, unlisted companies. Stocks largely shrugged off the move, with Istanbul’s main stock index down 0.6 percent.

A USTR spokeswoman said the review was unrelated to issues surrounding Brunson — a case that has prompted US sanctions against two Turkish cabinet ministers.

Erdoğan said on Saturday the sanctions by Washington against his ministers were disrespectful and that Turkey would retaliate by freezing assets of the US interior and justice secretaries.

Bilateral relations have plummeted over the fate of Brunson, who was held in a Turkish prison for 21 months until he was transferred to house arrest.

Brunson, who has lived in Turkey for more than two decades, faces up to 35 years in jail if found guilty of the charges, which he denies.

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