Monday, March 27, 2023

Turkey’s lira slips to new record low, stocks tumble following fatal quake

Turkey’s lira hit a fresh record low and its stock markets tumbled in the wake of the major earthquake, adding to pre-existing pressures from a strong dollar, geopolitical risks and surprise inflation.

The lira slipped to 18.85 in early trade before retracing most of its losses. The country’s main equities benchmark dropped as much as 4.6 percent with banks tumbling more than 5 percent before paring some losses with key indexes down around 2.5 percent on Monday.

“The tragic events with southern part of Turkey being hit by a powerful earthquake is source of additional uncertainty ahead of crucial elections that most likely are going to be held in May,” Piotr Matys, senior FX analyst at In Touch Capital Markets, told Reuters news agency.

A magnitude 7.8 earthquake has knocked down multiple buildings in southeast Turkey and northern Syria.

Turkish President Recep Tayyip Erdogan has said the death toll in the country has risen to 912.

He noted 5,383 people have been wounded in the country, adding he could not predict how high the casualty numbers would rise.

Turkey’s defence ministry says the country’s armed forces have established an air corridor to enable medical and rescue teams to reach the earthquake-hit areas.

“We mobilised our planes to send medical teams, search and rescue teams and their vehicles to the earthquake zone,” a statement by the ministry cited Defence Minister Hulusi Akar as saying.

The European Union is sending rescue teams and preparing further help for Turkey, according to the bloc’s crisis management commissioner.

“Teams from the Netherlands and Romania are already on their way,” with the EU’s Emergency Response Coordination Centre overseeing their deployment, commissioner Janez Lenarcic tweeted.

His office announced Turkey had requested EU assistance and that the bloc’s Civil Protection Mechanism had been activated in response.

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