Turkish lira losses beat currencies in Europe as COVID-19 cases jump

The Turkish lira led a decline in emerging market currencies in Europe on Friday as the government announced a jump in infections and deaths from the coronavirus.

The lira fell by 1.1 percent to 6.46 per dollar in early afternoon trading local time in Istanbul. The main BIST 100 share index declined 1.7 percent to 89,988 points.

Confirmed cases of people dying with the coronavirus in Turkey climbed by 1,196 to 3,629, the Health Ministry said late on Thursday. Deaths increased to 75 after another 16 people died.

Turkey is seeking to stem the spread of COVID-19 by encouraging people to stay at home, by barring large public gatherings and by closing the country’s mosques to worship. But President Recep Tayyip Erdoğan has yet to follow the lead of China and European countries by announcing a tight lockdown as he seeks to protect economic activity.

The lira led a decline in emerging market currencies in Europe. The Czech koruna dropped by 0.6 percent to 24.7 per dollar, while the Polish zloty fell 0.2 percent to 4.11 against the U.S. currency. The Ukrainian hryvnia gained 0.6 percent after the International Monetary Fund announced progress on a new rescue deal for the country’s economy.

The Turkish Industry and Business Association (TÜSİAD), which represents the country’s largest companies, wrote a letter to Erdoğan calling on him to implement stronger measures to boost the economy, Bloomberg reported on Friday. The group’s board has also discussed a strict lockdown as a means to contain the virus and help with business planning, Bloomberg said, citing a person familiar with the matter.

Erdoğan announced a 100-billion lira ($15.4 billion) package of tax cuts and payment deferrals to support the economy last week, but the measures fall far short of those announced in Europe.

On Thursday, Istanbul Mayor Ekrem İmamoğlu called on the government to impose a stricter curfew on the city. More than a million people had used public transport in Turkey’s largest city during the most critical period to halt the epidemic, he said.

The Turkish Medical Association has also warned the government’s isolation measures are insufficient and called on it to provide workers with paid leave in order to prevent millions of people mingling as they went to work.