Lira Weakens for Third Day After Syria Downs Turkish Warplane

The lira weakened for a third day to the lowest level in 11 days after a Turkish warplane was shot down by Syrian forces.

The lira slumped 0.4 percent to 1.8214 per dollar at 9:12 a.m. in Istanbul, paring this year’s gains versus the dollar to 3.8 percent.

The downing of the plane has heightened tensions that have arisen in the past year between Ankara and Damascus over Syrian President Bashar al-Assad’s crackdown on anti-government protesters, which has left more than 10,000 people dead. Turkey is still weighing a response to the attack which occurred in international airspace, Turkish Foreign Minister Ahmet Davutoglu said on state television yesterday. Syria has criticized Turkey for hosting meetings of Syrian opposition groups, while Turkey has called for a change of regime in its southern neighbour.

“This is a major development and we will see selling until it becomes clear how this will be resolved and the uncertainty is ended,” Onur Bayol, a currency and fixed-income trader at Denizbank AS in Istanbul, said in e-mailed comments.

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net