The Turkish lira dropped sharply on Monday after the U.S. Embassy in Ankara announced a suspension of visa services — a move Turkey quickly matched.
The visa-service suspensions were "a tit for tat, if you like, reaction. That sparked concerns over the stability of the lira," Rodrigo Catril, currency strategist at National Australia Bank, said on Monday. "Turkey has a huge current account deficit and therefore a huge need for funding."
A country develops a current account deficit when the value of its imports exceeds its exports, leaving a deficit that usually must be financed by borrowing.
On Sunday, the U.S. Embassy in the Turkish capital said on Twitter that "recent events" had forced Washington to reassess Ankara's commitment to the security of the U.S. mission and its personnel. All non-immigrant visa services had been suspended "effective immediately," the embassy added.