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Investor Alert

May 7, 2020, 7:45 a.m. EDT

Turkey's lira touches record low against dollars as doubts grow about central bank's ability to stem coronavirus pain

The Turkish lira hit its lowest level against the U.S. dollar on record, as investors bet that the economic pain from COVID-19 exerted on the emerging economy may be too severe for its central bank to ease. At last check, the Turkish lira (XTUP:TRYUSD) was off 0.8% against the dollar, changing hands at 7.2428. The currency has fallen 2.2% so far this week and 17.24% in the year to date against the greenback, FactSet data show. The currency breached a level in intraday action at 7.2362 that represents its lowest against the dollar since 2018, which had been its previous nadir. The country's finance minster, Berat Albayrak, son-in-law of the Turkish President Recep Tayyip Erdogan, has insisted that the country will rebound and rejected a report from the International Monetary Fund that it is likely to fall into a deep economic recession, the Financial Times reported , citing people familiar. The Wall Street Journal reported that Turkey entered the pandemic already in a weakened state, with high inflation and anemic growth. Meanwhile, the exchange-traded iShares MSCI Turkey ETF (NAS:TUR) , which gives investors exposure to the country, was down 2.2% this week so far and 30.2% thus far in 2020, according to FactSet data.

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