Azernews.Az

By Bloomberg

Turkey’s lira weakened the most in three weeks as Greece’s deepening financing crisis triggered a sell- off of emerging-market assets.

The currency depreciated 1.4 percent to 2.7028 per dollar at 8:25 a.m. in Istanbul, the biggest drop since June 8. The currency has lost 14 percent this year, the worst in emerging markets after Brazil’s real.

Investors are shunning all but the safest assets after Greece shut its banks and imposed capital controls in a dead-of- night announcement to avert the collapse of its financial system as the country edged closer to an exit from the euro. Turkey is Greece’s fourth-biggest trading partner, according to data compiled by Bloomberg.

“The drop is an initial reaction to the Greek crisis, but it’s unlikely to last long,” Alp Serbetli, an Istanbul-based foreign-exchange trader at Anadolubank AS, said by telephone. “Right now there’s no clarity on how Greece’s debts will be handled, so there’s a lot of uncertainty.”

The risk of potential contagion if Greece leaves the euro spurred a slide of as much as 1.9 percent in the European currency on Monday and sparked declines in Asian stocks.

The drop in the lira comes as Turkish politicians try to form a coalition government after the June 7 elections that failed to hand the ruling AK Party an outright majority. Failure to do so may lead to fresh elections.