By Anna Fedorova
The escalating row over Turkey’s detention of American pastor Andrew Brunson appeared to be the last straw, sending the lira into freefall in August.
Brunson was arrested in October 2016 and accused of colluding with an organization the Turkish government claims is behind that year’s failed coup attempt.
On August 17, a Turkish appeals court rejected the application to release the pastor, causing renewed outrage from the US government, which could lead to further sanctions.
On August 10, US president Donald Trump had already begun his economic attack on Turkey by announcing in a tweet that he would be doubling aluminium and steel tariffs on the country, to 20% and 50% respectively.
During the same week, Washington also said Turkey’s duty-free access to US goods was under review, which could affect some $1.66 billion of Turkish imports.
These announcements sent the lira over the edge, but underlying economic data have been putting pressure on investor confidence for some time.
One of the key concerns has been Turkey’s double-digit inflation and the government’s apparent inability to tackle the problem.