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Turkish lira continues losing value due to coronavirus concerns: report

A teller holds Turkish lira banknotes at a currency exchange office in Istanbul on August 13, 2018. Turkey's troubled lira tumbled on August 13 to fresh record lows against the euro and dollar, piling pressure on stock markets on fears the country's crisis could spill over into the world economy. / AFP PHOTO / Yasin AKGUL

The Turkish lira extended losses on Thursday as concern intensified among the public about the spread of the coronavirus, the Ahval news website reported.

The lira dropped 0.6 percent to 6.24 to the dollar at 12:05 p.m., approaching the lowest levels in normal trading since May. The main BIST-100 index dropped 4.6 percent to 96,331 points.

The Turkish lira hit a record low of 7.2 to the dollar in 2018, and the currency’s recovery from those levels has been volatile, prompting many Turks to stock up on foreign currency in a so-called dollarization of the economy. The coronavirus outbreak – Turkey announced its first case this week – may exacerbate that problem.

The government is seeking to reassure citizens that it is taking all measures to contain any spread of the virus. Until early Wednesday, Turkey was the only major country in the region not to announce any cases. That has raised suspicion of a possible government cover-up.

Local residents’ bank deposits in foreign currency now equal more than 25 percent of total deposits, an increase of some 10 basis points since mid-2018, according to central bank data. State-run banks have intervened in the currency markets to buy lira in recent months to help bolster its value.

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