Turkey’s lira fell on Friday after U.S. lawmakers approved mandatory sanctions on the country within 30 days for its purchase of Russian S-400 air defence missiles.
The sanctions, included in the final version of the annual U.S. defence spending act, would require the sitting U.S. president to select from a list of measures under the Countering America’s Adversaries Through Sanctions Act (CAATSA).
The lira dropped by 0.2 percent to 7.78 per dollar in afternoon trading Istanbul time.
U.S. sanctions on fellow NATO member Turkey would come at a time when the economy is struggling from the effects of a slump in the value of the lira – the currency has lost a quarter of its value this year – and the impact of a second wave of COVID-19. Turkey ranks 4th globally for daily virus infections behind the United States, Brazil and India, which have much larger populations.
President Donald Trump has said he will veto the bill, citing other concerns. A veto would need support among legislators and would be the first in almost six decades.
Turkey took delivery of the S-400s last year, sparking condemnation from the United States and intense concerns in NATO. The weapons, if activated, would potentially threaten the security of the alliance’s weapons systems, including the new F-35 stealth fighter jet, NATO says. Washington has already excluded Turkey from a programme to purchase the F-35s due to the missile purchase.
Sanctions imposed by the United States on Turkey in 2018 for its detention of an American pastor on terrorism charges sparked a currency crisis and a deep economic recession.
Turkey has called on the United States to enter talks to alleviate concerns that the S-400s pose a threat.
The U.S. president would select from a list of sanctions that vary in severity. U.S. president-elect Joe Biden is due to be inaugurated on Jan. 20.