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The Turkish lira tanks after reports of a coup in Istanbul

Murad Sezer/Reuters
Turkish military stand guard in Istanbul’s Taksim Square on July 15, 2016.
By Matt Phillips
Published Last updated This article is more than 2 years old.

The Turkish lira fell sharply Friday (July 15) after reports of a coup emerged in the late afternoon.

The currency’s fall of more than 4% in a market—where a 1% move is considered major—will put additional pressure on Turkey’s persistently high inflation. On the other hand, additional weakness won’t be unwelcome to Turkey’s exporters, who have been hurt by recent weakness in key markets such as the European Union, Iraq and Russia.

In theory, the weak lira could also be an incredible boon to Turkish tourism. But the difference between theory and practice is as stark as the sight of soldiers marching into Taksim Square. Unrest in the region, and increasingly in Turkey itself, has prompted a sharp downturn in tourist arrivals, which were down 35% in May, compared to the prior year.

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