Insider Economy Turkish lira slips as U.S. moves closer to sanctions over S-400s

Turkish lira slips as U.S. moves closer to sanctions over S-400s

Turkey’s lira slipped on Friday after U.S. lawmakers included mandatory Turkish sanctions in a defence spending bill that moves Washington a step closer to punishing its NATO ally for buying Russian S-400 missile defences last year.

The final version of the $740 billion annual U.S. defence spending legislation would oblige the White House to select from a list of sanctions over the S-400s, which Washington says are incompatible with NATO operations.

U.S. President Donald Trump, who is set to step down next month, has said he will veto the bill over separate provisions. But he will need support in Congress and it would be the first such veto in nearly 60 years.

Russia delivered the S-400 ground-to-air systems last year and Turkey has tested them as recently as October. Ankara says they would not be integrated into NATO systems and pose no threat, and it has called for a joint working group.

The threat of Western sanctions has weighed on the lira currency, which hit a series of record lows this year and was down 0.4% at 7.808 versus the dollar at 0728 GMT.

Sanctions could harm a Turkish economy already struggling with a coronavirus-induced slowdown, double-digit inflation and badly depleted foreign reserves.

BIDEN TO BE TOUGHER?

President-elect Joe Biden is expected to be tougher on Turkey than Trump, who had warm ties with President Tayyip Erdogan despite growing hostility among U.S. lawmakers towards Turkey’s more aggressive foreign policy.

The defence bill includes sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA), which are designed in part to deter cooperation with Russia. The U.S. president would select from a list of mild to harsh possible sanctions.

“If Trump chooses from among the lighter sanctions I think given the global risk appetite we still can see a benign performance in the lira,” said one Turkish trader.

The bill is the result of months of negotiations between House and Senate Republicans and Democrats. Committee staff said it would be difficult to override a Trump veto with Congress in session only until year-end.

Last year, Washington suspended Turkey from its F-35 jet programme over the S-400s.

(Reuters)

Top Stories

Police still looking for young man missing from mental hospital

Police are still looking for a 20-year-old man missing from Athalassa Psychiatric Hospital in Nicosia since Saturday afternoon. He is Theodoros Topouzides (top photo) from...

Mainly fine on Monday with high cloud in the afternoon

Mainly fine on Monday with high cloud in the afternoon and light to moderate north-easterly to south-easterly winds blowing at a force of 3...

Turkey receives 6.5 mln doses of Sinovac vaccine

Turkey received 6.5 million further doses of the coronavirus vaccine made by China's Sinovac Biotech on Monday, CNN Turk and other media reported, allowing its...

Greece detects 32 cases of UK coronavirus variant

Greece has detected 32 cases of the British variant of COVID-19, health authorities said late on Sunday, with the country's Network of Genomic Monitoring planning...

Where to get antigen rapid tests on Monday, 25 January

The Health Ministry announced the following antigen rapid test sites for Monday: LIMASSOL Parking place Lidl supermarket, Limassol 08:30-16:30 Parking place Sklavenitis supermarket, Germasoyia 08:30-16:30 Apostles Petros and...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...