The Turkish Lira tumbled against the Pound and the majority of its most traded peers on Tuesday as a new political crisis in Turkey spooked investors and damaged sentiment for emerging market assets.
The currency’s decline occurred after opposition leaders called for the resignation of embattled Prime Minister Recep Tayyip Erdogan in the wake of the release of secret recordings on video sharing site Youtube in which he allegedly discussed hidden funds. The recording apparently reveals a conversation between the Prime Minister and his son Bilal discussing ways in which to conceal funds from a police investigation into government corruption. Opponents accused him of corruption in the latest crisis to rock the nation.
Erdogan’s office said that the recordings were ‘completely untrue’.
“The recordings, which were released via the Internet this evening, accompanied with the allegation that they were a telephone conversation between our Prime Minister Recep Tayyip Erdogan and his son, are completely untrue and the product of an immoral montage. Those who created this dirty conspiracy targeting the Prime Minister of the Republic of Turkey will be brought to account within the law,” Erdogan’s office said in a statement.
The opposition called for Erdogan to resign with Huluk Koc the deputy chairman of the Republican Party saying on national television; “It’s unacceptable for someone who’s in the middle of thse dirty relationships to govern Turkey after this hour.”
Since the recording was released the Lira slid sharply against the Pound, US Dollar and most other major peers as sentiment towards emerging markets, already under pressure, fell further.
“Despite the clear dnial from the Prime Minister last night, investors are uneasy, thinking what if they are genuine and what if others follow. The market is reacting to these alleged recordings,” said a market strategist based in Istanbul.
Current Turkish Lira (TRY) Exchange Rates:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Turkish Lira,3.6863 ,
Euro,,Turkish Lira,3.0390 ,
US Dollar,,Turkish Lira,2.2103 ,
Australian Dollar,,Turkish Lira,1.9938 ,
[/table]
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