The diplomatic and economic spat between United States and Turkey has taken a huge toll on the GCC market. The investors are staying clear from assets perceived as risky. This led to the drop in the Gulf stocks. This worsening dispute between the two reverberated through the global economy, hastening a road flight of money from emerging markets and leaving instability throughout the Middle East market.
After the U S President, Donald Trump doubled tariffs on the Turkish Steel and Aluminium imports, the Turkish lira fell on a record low of 18%. Over this, the diplomatic dispute between Saudi Arabia and Canada was an added pressure. Lira, which traded at 4.7 to the dollar a month ago, fell down to 6.4. It was the first time ever more than 6 lira was needed to buy a dollar.
The Turkish crisis impacted the most in the Qatar market with the index being was down by 2.6%. in Dubai, the index fell down by one percent and in Saudi Arabia it fell down by 1.4%.
Dubai emirates largest bank, Emirates NBD had agreed to buy Turkey’s Denizbank from Russia’s state-owned Sberbank for $3.2 billion. It is said that this turmoil will lead to a renegotiation of the deal.