8.9 C
Frankfurt am Main

Turkish markets tumble under threat of US sanctions: report

Must read

The lira broke past the 5.93-per-dollar mark on Monday even as lenders sold more than $1 billion worth of foreign exchange, according to two people familiar with the matter who asked not to be named because because the information is not public, Bloomberg reported.

Last week state banks sold the equivalent of at least $3.5 billion worth to support the currency, three people said.

Stocks plunged more than 5 percent, two-year domestic bond yields soared as much as 66 basis points and the lira’s one-month implied yield was poised for its biggest jump since March. Room for more interest-rate cuts appears to have vanished, with one-year cross-currency swaps touching 16.6 percent, above the central bank’s one-week repo rate.

The latest turmoil comes after US President Donald Trump said Washington is ready to sanction Turkey in response to its military incursion in northeast Syria, raising the prospect of another market rout. “Big sanctions on Turkey coming!” Trump said in a separate tweet on Monday, giving way to another leg lower for the lira.

Turkey relies heavily on foreign capital inflows and is still struggling after a recession fueled by a currency crisis last year, which was partly precipitated by American sanctions.

Liked it? Take a second to support Turkish Minute on Patreon!
Become a patron at Patreon!
More News
Latest News