Turkey's President Tayyip Erdogan fist bumps U.S. President Joe Biden during a plenary session at a NATO summit in Brussels, Belgium, June 14, 2021. Olivier Matthys/Pool
Turkey’s lira fell for a second day, trimming last week’s gains after a much-anticipated meeting between the U.S. President Joe Biden and Turkey’s Recep Tayyip Erdogan failed to produce a breakthrough that would ease political tensions.
The lira weakened as much as 1.5% against the dollar on Tuesday, leading declines among emerging-market currencies a day after Erdogan met with Biden on the margins of a NATO summit in Brussels. The yield on 10-year bonds jumped 20 basis points to 18.24%, while the benchmark Borsa Istanbul 100 Index fell 1.2%.
Erdogan Says Turkish Stance on Russian S-400 Missiles Unchanged
The currency rallied more than 3% last week, notching up the best performance in developing nations on optimism that the meeting between the heads of state of two NATO members could ease tensions.
However, Erdogan’s remarks that Turkey’s stance on its purchase of Russian S-400 missile systems remains unchanged dashed hopes for imminent progress.
Although the two leaders "stated that their teams would continue discussions,” no major breakthroughs were announced, a factor that led the lira to surrender some last week’s gains, Istanbul-based Seker Investment wrote in a morning note.
The lira was trading 1.2% lower at 8.5678 per U.S. dollar as of 1:57 p.m. in Istanbul.
