August 22, 2019 / 9:18 AM / 4 months ago

Turkish lira weakens some 1% against dollar

ISTANBUL, Aug 22 (Reuters) - The Turkish lira weakened around 1% against the dollar on Thursday, its weakest since early July, as concerns persisted over the impact of a recent central bank move and tensions in Syria’s Idlib region.

The lira stood at 5.7640 at 0903 GMT, having weakened as far as 5.7900 and compared with a close of 5.7130 on Wednesday.

Investors were concerned over the possible impact of rapid loan growth after a central bank decision to lower required reserves limits and boost returns for lenders with more than 10% loan growth.

“The mode and perspective for the Turkish market changed after the central bank’s move on required reserves,” an FX trader at one bank told Reuters.

The Turkish currency has lost some 8% of its value against the U.S. dollar so far this year, on top of a currency crisis which wiped around 30% off the lira’s dollar value in 2018, tipping the economy into recession.

Concerns about developments in Syria also weighed on market sentiment after Ankara said on Monday an air strike on a Turkish military convoy in northwest Syria killed three civilians.

The main BIST 100 stock index was trading 0.77% lower while the banking index was some 1% weaker. (Reporting by Nevzat Devranoglu and Daren Butler; Writing by Ezgi Erkoyun; Editing by Jon Boyle)

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