Turkish Lira Nears Record Low of 20 vs Dollar Ahead of Election Runoff

A U.S. one dollar banknote is seen next to Turkish lira banknotes in this illustration taken in Istanbul, Türkiye November 23, 2021. REUTERS/Murad Sezer/Illustration/File Photo
A U.S. one dollar banknote is seen next to Turkish lira banknotes in this illustration taken in Istanbul, Türkiye November 23, 2021. REUTERS/Murad Sezer/Illustration/File Photo
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Turkish Lira Nears Record Low of 20 vs Dollar Ahead of Election Runoff

A U.S. one dollar banknote is seen next to Turkish lira banknotes in this illustration taken in Istanbul, Türkiye November 23, 2021. REUTERS/Murad Sezer/Illustration/File Photo
A U.S. one dollar banknote is seen next to Turkish lira banknotes in this illustration taken in Istanbul, Türkiye November 23, 2021. REUTERS/Murad Sezer/Illustration/File Photo

The Turkish lira weakened to a record low just off 20 against the dollar on Friday ahead of this weekend's presidential election runoff which will decide whether President Tayyip Erdogan extends his rule into a third decade.

At 0413 GMT, the lira stood at 19.9845 against the dollar, off a record low of 19.9950 in early trade, Reuters reported.

Türkiye's sovereign dollar bonds and equities have plunged, while the cost of insuring exposure to Turkish debt has spiked since the first round of the presidential election on May 14.

Erdogan was well ahead of his main rival Kemal Kilicdaroglu in that vote and fell just short of the more than 50% support he needed to avoid going to Sunday's runoff.



Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
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Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)

The United States on Thursday called on Israel to extend its cooperation with Palestinian banks for another year, to avoid blocking vital transactions in the occupied West Bank.

"I am glad that Israel has allowed its banks to continue cooperating with Palestinian banks, but I remain convinced that a one-year extension of the waiver to facilitate this cooperation is needed," US Treasury Secretary Janet Yellen said Thursday, on the sidelines of a meeting of G20 finance ministers in Rio de Janeiro.

In May, Israeli Finance Minister Bezalel Smotrich threatened to cut off a vital banking channel between Israel and the West Bank in response to three European countries recognizing the State of Palestine.

On June 30, however, Smotrich extended a waiver that allows cooperation between Israel's banking system and Palestinian banks in the occupied West Bank for four months, according to Israeli media, according to AFP.

The Times of Israel newspaper reported that the decision on the waiver was made at a cabinet meeting in a "move that saw Israel legalize several West Bank settlement outposts."

The waiver was due to expire at the end of June, and the extension permitted Israeli banks to process payments for salaries and services to the Palestinian Authority in shekels, averting a blow to a Palestinian economy already devastated by the war in Gaza.

The Israeli threat raised serious concerns in the United States, which said at the time it feared "a humanitarian crisis" if banking ties were cut.

According to Washington, these banking channels are key to nearly $8 billion of imports from Israel to the West Bank, including electricity, water, fuel and food.