Turkish Lira Plummets Amid Contentious Political Relations With US

“Recent events have forced the United States government to reassess the commitment of the government of Turkey to the security of US mission facilities and personnel. In order to minimise the number of visitors to our embassy and consulates while this assessment proceeds, effective immediately we have suspended all non-immigrant visa services at all US diplomatic facilities in Turkey.” – the US embassy on Sunday

The majority of new US visas for Turkish citizens have been suspended after a US embassy employee was arrested. The new sanctions will prevent Turks from entering the US.

The bubbling tensions between the nations caused the Turkish lira to drop by as much as 6.6% overnight. This sell-off is an illustration of how vulnerable emerging economies are under the hawkish Federal Reserve – as interest rates rise we will continue to see a vacuum effect on developing nations.

Japanese, Canadian and US markets are closed for public holidays, the low trading volumes added to the Turkish market’s woes.

In response to the block, Turkey have prohibited the movement of US citizens into Turkey.

The employee was the second embassy member to be arrested this year, add this to over ten US citizens held for alleged allegiance to Fethullah Gulen, – the Islamic preacher who has been accused of being the instigator of the 2016 coup – living in the US who Turkey have sought extradition for years.

The block will likely exasperate the anti-US sentiment in Turkey. The new deals between Russia in Syria coupled with contentious relations with the US will mean the bilateral ties will be strained.

On Monday, Turkey has urged the US to review its visa suspension stating it was causing “unnecessary tensions”. Turkish Justice Minister Abdulhamit Gul said that if the US has security concerns about security, measures would be taken to address them.