Euro zone banks hammered for Turkish exposure

10 Aug by Vitaliy Dadalyan

Euro zone banks hammered for Turkish exposure

Euro zone banks hammered for Turkish exposure

Investors dumped euro zone bank shares on Friday on concerns about their exposure to Turkey as the lira fell to yet another record low with a defiant government showing few signs it is ready to take decisive steps to stabilise the currency. A widening rift with the United States, its main NATO ally, and President Tayyip Erdogan’s grip on monetary policy under a new powerful executive presidency have helped to drive the lira down by more than 40 percent this year, a particular vulnerability for Turkish banks as over a third of their lending is in foreign currencies. U.S. President Donald Trump said on Friday he had authorised higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminium and 50 percent one on steel, as tensions rose between the two NATO allies over Ankara’s detention of an evangelical pastor and other diplomatic issues.

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