Turkey's lira firmed on Tuesday as investors weighed up reports that Ankara was evaluating Washington's proposal to delay delivery of Russian defence systems and state banks continued to sell dollars to support the currency. The currency has been battered this year on worries that Ankara's push to purchase Russian S-400 missile defence systems could lead to sanctions from Washington.
But a source said on Monday the United States had asked Turkey to delay the delivery, scheduled for July, which could lead to an improvement in relations between the NATO allies. However, a senior Turkish official said Ankara's position had not changed.
The lira stood at 6.0100 against the dollar at 1527 GMT, some 0.75% stronger than Monday's close of 6.0550. It firmed to as much as 5.9890 earlier in the day.
The lira is supported by a positive global sentiment toward emerging market currencies as well as news regarding the postponement of the S-400 delivery, said Guillaume Tresca, senior emerging markets strategist at Credit Agricole. "If the reports are confirmed, it means that Turkey and the US will have room to manoeuvre and discuss the issue," he said.
Separately, industrial production fell a less-than-expected 2.2% annually in March, logging its seventh consecutive month of declines after the economy tipped into recession last year. Month-on-month, it was up 2.1% on a calendar and seasonally adjusted basis, data showed.
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