Turkish lira

TRY per USD, week to Jan 16. Source: Thomson Reuters

Turkey’s President Recep Tayyip Erdogan has got embroiled in interest rates again – and the country’s currency immediately felt the impact.

Erdogan’s allergy to high interest rates is well known, as is his insistence that there is something out there called “the interest rate lobby” that drives rates up in a bid to enfeeble the Turkish economy. But all the same he was in fine form in a speech on Friday. Read more

The Turkish lira rounded off the week by tumbling to its lowest levels against the dollar for almost a year, amid investor nervousness about
emerging markets.

By evening trade in Istanbul the currency had fallen beyond TL2.30 to the US dollar, more than 1 per cent down on the day and the weakest level since January, when the Turkish central bank moved to increase
interest rates – a dramatic shift in policy that at the time halted a
precipitous drop in its value. Read more

In a moment of drama at midnight on Tuesday, Turkey’s central bank performed a volte face, increasing interest rates across the board where it had previously been reluctant to raise them. It more than doubled one key rate.

It was a striking move, given the political and financial backdrop: prime minister Recep Tayyip Erdogan has long made clear his opposition to high interest rates, while investors had become worried about Turkey and other emerging markets, writes Daniel Dombey in Istanbul.

 Read more

After hitting all-time lows against the dollar, the lira has staged a big comeback. Here’s the essential reading: Read more

The Turkish lira hit the latest in a series of all-time lows against the dollar on Monday when it fell to TL2.2502, on a day when the country’s new economy minister said a further slide would not be a problem and called on the central bank not to increase interest rates.

An interest rate rise might in normal circumstances be expected at the bank’s monetary policy committee meeting on Tuesday.

But this is Turkey. Read more

The Turkish lira fell to a new all-time low against the dollar on Thursday as a corruption probe focused on figures close to the government caused continued upheaval in markets.

The currency has lost around a fifth of its value against the dollar in the last year, with Turkey – reliant on inflows of foreign funds to finance a persistent current account deficit – seen as especially vulnerable to the US Federal Reserve’s imminent withdrawal of monetary stimulus. Read more

The final weekender of 2013: our most read posts, five things we have learned, our favourite long reads, and the week in a chart: the Turkish lira. Read more

Has there just been a landmark change in how Turkey runs its economy? It depends on how much importance one gives to what the country’s central bank says rather than what it does. It also depends on how much of a free hand it has.

There’s clearly been a noteworthy shift – the bank, widely known for its unorthodox stance (read: its reluctance to raise interest rates) tightened policy this week in a way that had some analysts clamouring that the days of unorthodoxy were over. Read more

The week in emerging markets, with our most read stories, five things we have learned, our favourite long reads, and the week in a chart – this week: the Turkish lira.
 Read more

On Thursday, as Daniel Dombey reported on beyondbrics, there was some respite for Turkey as the pressure on the lira eased a bit after Ben Bernanke‘s comments.

But come Friday, the currency was in the firing line yet again, falling to around 1.96 to the dollar at one point. Investors are pushing yields on the two year debt up and up. A big test is coming for Erdogan’s opposition to raising rates. Read more

The week in emerging markets, with our most read stories, five things we have learned, our favourite long reads, and the week in a chart – this week: the Turkish lira. Read more

With Brazil taking over the running in emerging market protests, the television cameras have turned their focus away from Turkey. But investors have not: Istanbul remains firmly in their sights – as does the possibility of further markets carnage (whether or not the demonstrators return to the streets).

On Friday, the markets were calm as bankers weighed the impact of the central bank’s latest attempt to shore up the lira. But nobody’s fooled – in a world of higher borrowing costs, Turkey is vulnerable. Read more

Some all-time lows for EM currencies on Thursday:

Turkish lira, intraday low of 1.937 to the dollar, latest 1.927

Indian rupee, intraday low of 59.975, latest at 59.6175 Read more

Although police and protesters are fighting running battles in Taksim Square in Istanbul on Tuesday, in what looks like a new stage in the country’s political crisis, investors seem ready to sit out the day’s events.

The lira has strengthened against the dollar, falling back from over 1.906 to around 1.892. The BIST 100 index, after an 18 per cent drop from its record May high, has also had a decent start to the day, up around 1 per cent. Why? Read more

After buying a bank in Turkey last year it was a logical step for Sberbank to start borrowing in the Turkish currency. The Russian state savings bank raised 550m Turkish lira ($304m) in an inaugural lira-denominated eurobond this week and said it would use the proceeds to support the operations of its Denizbank Turkish subsidiary.

Sberbank placed the five year “eurolira” bond at 7.3 per cent, slightly below the 7.5 per cent price guidance for the issue that was executed on Monday after a one-day roadshow. Read more

Mrs Watanabe just can’t get enough of Turkey these days.

Last year, Japan’s legion of retail investors (dubbed Mrs Watanabe because women mostly manage the household savings in Japan) poured more money into Turkish lira-denominated bonds than any other type of overseas currency bonds – overtaking even the Brazilian real and the Australian dollar. Read more

Mrs Watanabe is back. The fabled Japanese housewife investor, burned by her love affair with the Brazilian real, appeared to have rediscovered a taste for the carry trade.

The object of her affection this time? The Turkish lira.

The appetite for Turkish and lira-linked assets from yield-hungry Japanese retail investors has grown by leaps and bounds since the start of the year. From just $136m in 2010, lira-denominated Uridashi bond issuance – as foreign-currency debt sold to Japanese retail investors is called – reached nearly $2bn in the first six months of this year. Read more

Inflation has hit a three year high in Turkey, and most analysts agree: after a long period of confusion over the country’s unorthodox monetary policy, the interest rates that matter are set to stay high, for the short term at least.

The country has a notoriously arcane monetary policy, in which there is not one key interest rate but instead an “interest rate corridor” – a potpourri of weekly and overnight rates – which the central bank uses to shift the effective rate on an almost daily basis. Read more