Turkish Lira Advances on Hopes of Missile Spat Resolution

Source: Bloomberg

Turkey’s lira strengthened on Thursday to its best showing in a month after a top official welcomed a possible resolution to the conflict with the United States.

• The lira strengthened by as much as 1.7% to hit 8.2860 against the greenback.
• Weekly gains rose to 4.4% to mark the best weekly performance since March but lost ground later.
• Defense Minister Hulusi Akar said reasonable and logical solutions to the spat with the U.S. are “always possible” after a phone call with American counterpart Lloyd Austin. 
• The minister noted Turkey remains ready to discuss partners’ technical concerns, which was already rejected by Washington.
• Presidents Joe Biden and Recep Tayyip Erdogan will hold their first meeting on Monday, where discussions on trust-building cooperation are possible.
• Sources privy of the meeting agenda have denied that Turkey is considering a compromise on the missiles.
• The U.S. wants Ankara to cancel Ankara’s purchase of Russian S-400 missiles in exchange for lifting sanctions, but Turkey has not shown any indications of doing so.
• Concerns stem from the possibility that the missiles could be used to gather information on the F-35 fighter jet that Turkey helped build.