The Turkey-related ETF rallied Wednesday after President Donald Trump said the United States will lift sanctions on the country in response to Ankara’s decision to make the cease-fire along the border with Syria “permanent”.

The iShares MSCI Turkey ETF (NasdaqGM: TUR) increased 3.8% on Wednesday and broke back above its short- and long-term trend lines at the 50- and 200-day simple moving averages, respectively.

The Trump administration previously announced sanctions on October 14 after the Turkish military pushed an offensive against Krudish forces into northern Syria, the Washington Post reports.

On Wednesday, Trump called the cease-fire “permanent” but added that it is “questionable” when discussing the historically disputed region, and he added that sanctions on Turkey would be lifted “unless something happens that we’re not happy with.”

The Turkish lira currency jumped after Trump stated his intention to lift sanctions on Turkey, rising 1.4% against the U.S. dollar.

The lira has been a significant contributing factor to the previous pullback in Turkey’s market. Pressure on the currency and attempts to stabilize it have weighed on the country’s foreign currency reserves, which have left the government with little room to defend the currency if sanctions were to be tightened. Any sanctions would have dealt a further blow to an already fragile economy.

“A shrinking pool of central bank reserves, large foreign currency rollover needs, and other economic vulnerabilities will limit Turkey’s room for maneuver in Syria,” Karl Schamotta, director of foreign exchange strategy and structured products at Cambridge Global Payments, previously told Reuters.

The lira was also the center of last year’s sell-off in Turkey’s equity market after the currency plunged 30% and triggered an economic recession, following a standoff with the U.S.

“Net reserves are negligible in Turkey,” Tatha Ghose, forex and emerging market analyst at Commerzbank, told Reuters.

“We assume that the Turkish central bank has no real reserve resources to fight lira weakness if and when it arises,” Ghose added.

For more information on the Turkish markets, visit our Turkey category.

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