Turkish lira strengthens after Trump, Erdoğan discuss S-400 missile purchase

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US President Donald Trump (L) and Turkey's President Recep Tayyip Erdoğan / AFP PHOTO

Turkey’s lira firmed nearly 1 percent on Thursday on expectations that ties with Washington will improve after the two presidents discussed Ankara’s purchase of a Russian S-400 missile defense system during a phone call, Reuters reported.

The lira was down as much as 14 percent this year due in part to growing friction between the NATO allies and the risk that delivery of the Russian-made surface-to-air weapon would trigger US sanctions. Washington says the S-400s would compromise its F-35 fighter jets.

During Wednesday’s call, Turkish President Tayyip Erdogan reiterated to US President Donald Trump a proposal to set up a working group to assess the impact of the S-400s. The two also agreed to meet on the sidelines of a G-20 summit in Japan at the end of June.

The lira stood at 5.9650 at 0838 GMT, firming nearly 0.85 percent from Wednesday’s close of 6.0155. Earlier, it firmed as much as 5.9625, its strongest in more than two weeks.

The lira also firmed earlier this week after Defense Minister Hulusi Akar’s comments that the system may not make it in time for its scheduled delivery in June sparked optimism among investors, despite him saying that they would be delivered in the coming months.

Separately, the central bank’s net reserves stood at $26.52 billion as of May 24, data showed on Thursday, rising from $24.88 billion a week earlier.

Turkey’s main share index BIST100 rose 2.02 percent, while the main banking index was up 3.1 percent.

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