Turkish Lira at record low, stock market declines as Israel-Gaza conflict sparks geopolitical turmoil

Turkish financial markets saw the US dollar exceed 28 Turkish Liras, and stock market indices tumbled amid increasing geopolitical concerns as Israel's actions in Gaza triggered fears of wider regional instability.

Israel’s offensive has triggered worldwide outrage and raised concerns that the Israel-Palestine conflict could potentially spread to neighboring regions, with a particularly detrimental impact on global oil supplies.

As geopolitical concerns continue to mount, the US dollar’s exchange rate against the Turkish Lira has maintained its gradual daily ascent, reaching a high of 28.05. Consequently, the Turkish Lira has depreciated by approximately 33.3% against the dollar since the beginning of the year, while the loss stands at 26.1% since June when public control over the exchange rate slackened.

Further compounding the situation, investors have grown apprehensive about the possibility of other nations, such as Iran, becoming embroiled in the intensifying conflicts, causing oil prices to surge. The price of a Brent crude oil barrel, which reached $91 yesterday, concluded the day at $89.90, marking a 1.59% increase. Simultaneously, West Texas Intermediate (WTI) crude oil traded at $86.98 per barrel during the same time frame.

Meanwhile, the price of an ounce of gold climbed to test levels around $1940, a 0.64% increase from the previous day. On the domestic front, the exchange rates for precious metals were as follows: one gram of gold traded at 1745 Turkish Lira, while a quarter gold coin traded at 2,853 Turkish Lira, and a Republic gold coin at 11,378 Turkish Lira.

Turkish stock markets were not immune to the unfolding turmoil. The Borsa Istanbul's BIST 100 index opened the trading day with a 1.85% decrease, starting at 7,964.63 points, which was 150.38 points lower than the previous closing. Analysts noted that global equity markets have seen heightened risk perception following the attack on the el-Ahli Baptist Hospital in Gaza.