BUSINESS NEWS - The rand plunged more than 8% along with the Turkish lira on Monday morning, reaching a low point of R15.41 to the dollar at about 2.30am, where it was last in June 2016.

The currency managed to recover some ground a few hours later, to reach R14.56 by 7.27am. It continued to recover slowly.

Overnight, Asian markets had tumbled and the Turkish lira dived almost eight percent Monday on fears that the economic crisis gripping Turkey could spill over into the global economy.

With investors already on edge over the China-US trade war, the lira’s collapse sparked a sell-off in Europe and New York at the end of last week, with safe haven assets including the Japanese yen and Swiss franc rallying.

The lira dived to a record low of 7.2362 to the dollar at one point overnight before recovering slightly after the country’s finance minister said Ankara was planning to roll out an “action plan” on Monday in response to the crisis.

“Our institutions will take necessary action from Monday in order to relieve the markets,” Berat Albayrak said, adding that the plan would centre on “the state of our banks and the small and medium size enterprises” most affected by the lira’s plunge.

The lira has been hammered this year, having started January at around 3.70 to the dollar, while it was also sharply down against the euro.

However, the European unit was taking a hit against the greenback on worries about the possible impact on some European banks, including Spain’s BBVA, Italy’s UniCredit and France’s BNP Paribas.

Despite the tumult, President Tayyip Erdogan remains in combative mood, calling the rout a “political, underhand plot” against Turkey.

The crisis has been sparked by a series of issues including a faltering economy — the central bank has defied market calls for rate hikes — and tensions with the United States, which has hit Turkey with sanctions over its detention of an American pastor.

Ankara has also hit out at Washington’s cooperation with Syrian Kurdish militia in the fight against Islamic State.

Read more on the Caxton publication, The Citizen.