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The lira is plunging after S&P downgraded Turkey

The lira is plunging after S&P downgraded Turkey
Finance1 min read

The Turkish lira is collapsing after news that S&P downgraded Turkey.

The lira weakened by as much as 1.3% to 3.0804 per dollar - a new all-time high - around 12:11 p.m. ET.

It quickly retraced some of its steps, and is now weaker by 1.1% 3.0744 at 12:14 p.m. ET.

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Investing.com

The S&P downgraded Turkey to BB from BB-plus and changed the country's outlook to negative.

The S&P noted that the attempted coup "further eroded the country's institutional checks and balances," according to MarketWatch, and it added that "risks to Turkey's ability to roll over its external debt have increased," according to Bloomberg.

Notably, Turkish president Recep Tayyip Erdogan will chair a meeting today of the National Security Council and then will announce an "important decision."

"Markets have reacted badly to the ongoing purges of the judiciary, military, police, and academia. If Erdogan announces more draconian measures, we suspect that USD/TRY (which made a marginal new high for this move) will likely make new all-time highs," argued Chandler.

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