Turkey’s currency lira plunged on Monday after the U.S. and Turkey suspended each other’s visa services due to “recent events.
On Sunday, the U.S. Embassy announced a suspension of visa service. “Recent events have forced the United States Government to reassess the commitment of the Government of Turkey to the security of U.S. Mission facilities and personnel. In order to minimise the number of visitors to our embassy and consulates while this assessment proceeds, effective immediately we have suspended all non-immigrant visa services at all US diplomatic facilities in Turkey.” The U.S. Embassy Turkey said in a statement on Sunday.
The move follows the arrest of a Turkish national who works at the U.S. consulate by Turkish authorities.
The Turkey’s embassy quickly responded to the move by suspended non-immigrant visa services in a similar way.
The news sent the Turkish lira drop on Monday. The lira dropped as much as 2.5 percent during the Asian Trading time.
“Politically, Turkey’s case is an isolated case so it’s unlikely that there will be a durable contagion into the rest of EM,” Nader Naeimi, who heads a dynamic investment fund at AMP Capital Investors Ltd. in Sydney said in a Bloomberg news report, “However, the short-term impact to sentiment across EM FX is a strong possibility at a time where foreign currency markets will continue to be forced to adjust their expectations of U.S. rate hikes.”