ANKARA: The Turkish lira slipped to 13.7605 against the US dollar on Tuesday, its weakest since Jan. 12, after Russia escalated tensions in eastern Ukraine, posing a risk to Turkey's macroeconomic stability.
Russia's President Vladimir Putin recognised two breakaway regions in eastern Ukraine as independent on Monday. The threat of war between Turkey's Black Sea neighbours Russia and Ukraine could harm the country's already ailing economy after a currency crisis in December.
"A prolonged conflict...could keep energy prices high throughout the year, or may even propel them higher. The energy shock is already advancing through various channels to make life miserable in Turkey," said Atilla Yesilada, Istanbul-based analyst at GlobalSource Partners.
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Any prolonged conflict could also cut tourist flows to Turkey by around $2 billion this summer, assuming Russian and Ukrainian tourist arrivals stay the same as in 2021 or dip a bit, he wrote in a note.
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