Turkey’s lira firmed on Thursday, outperforming some other emerging market currencies, while the main stock index declined more than 2 percent after a three-day market holiday, Reuters reported.
China’s threat to impose counter-measures in retaliation for the latest US tariffs knocked stocks sprawling on Thursday, checking an earlier attempt to recover from a rout sparked by fears of a world recession.
Wall Street futures signaled another weak open for US stocks, which fell 3 percent on Wednesday after long-dated bond yields dropped, raising fears the US economy was hurtling towards recession and dragging world stocks with it.
Turkey’s main BIST 100 share index was down 2.16 percent, while the banking index declined 4.51 percent by 1154 GMT.
The lira stood at 5.5850 at 1154 GMT, firming more than 0.5 percent from Wednesday’s close of 5.6175. It firmed as far as 5.5480 earlier in the day.
The lira has been attractive to investors due to high real interest rates, helping it outperform its emerging market peers recently, said William Jackson, chief emerging markets economist at Capital Economics.
Turkey’s central bank cut its policy rate by 425 basis points last month to 19.75 percent, while inflation stood at 16.65 percent.
The currency has received support from expectations of a looser monetary policy by the US Federal Reserve as well as the European Central Bank.
