The Turkish lira plunges to a record low after the US announces sanctions

Hakan Burak Altunoz/Anadolu Agency/Getty Images

Turkey’s currency plummeted to a record low against the dollar Wednesday after the Trump administration said it plans to impose sanctions on its NATO ally for failing to release a detained American pastor who has been imprisoned in the country for nearly two years.

The lira fell more than 1.7%, past the key level of 5 versus the dollar at 2 p.m. ET. It put in a low of 5.0157 per dollar about 30 minutes prior.

The Treasury Department will place sanctions on Turkey’s minister of justice and minister of interior, White House Press Secretary Sarah Sanders confirmed at a press briefing.

Sanders said the officials played “leading roles” in the arrest and detention of 50-year-old Andrew Brunson. The Turkish government arrested Brunson in Izmir in 2016 for allegedly aiding a failed military coup, accusations the pastor denies.

The lira has shed nearly a third of its value against the dollar this year. It has faced mounting pressure following the June reelection of President Recep Tayyip Erdogan, who grabbed newly-granted executive powers in the historic political change.

Erdogan has signalled he will wield more influence over the country’s central bank in his term. The self-proclaimed “enemy of interest-rates” has pushed for unorthodox policies like cutting borrowing costs amid accelerating inflation.

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