EU Is `Closely Following' Global Impact From Turkish Lira Crisis
(Bloomberg) -- The European Union said it is closely monitoring the global fallout from the plunge in the Turkish lira, highlighting in particular the potential effect on the region’s banks.
“The commission is closely following developments on the global markets” amid the sharp declines in Turkey’s currency, as well as Turkish stocks and bonds, Christian Spahr, a spokesman for the European Commission, told reporters in Brussels on Monday. “We are aware of potential impacts on European banks of the development of the Turkish lira.”
Turkish authorities made their first move to bolster the financial system, after the lira lost about a quarter of its value against the dollar in the wake of the U.S. imposing sanctions on two ministers in President Recep Tayyip Erdogan’s government. The Trump administration took the action over the detention of an American pastor in Turkey.
The central bank in Ankara promised to "take all necessary measures." The lira weakened about 6.6 percent to 6.8819 to the dollar at 12:02 p.m. in Istanbul on Monday. The yield on two-year government bonds rose 94 basis points to 25.74 percent, the highest since the global financial crisis in 2008.
Spahr, spokesman for the EU’s executive branch, declined to comment on market movements. He also said the commission would have no comment on any potential impact on the EU-Turkey accord on immigration.
“We don’t want to engage in speculations on what will happen on the migration front,” Spahr said.
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