Turkey bans 6 foreign lenders from betting against local stocks: report

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Brokers works at the Istanbul Stock Exchange in Istanbul, 30 April 2007. The Turkish lira tumbled iearly 30 April 2007 in line with heavy losses on the Istanbul stock market, amid a tense standoff between the Islamist-rooted government and the army over presidential elections. AFP PHOTO/HOCINE ZAOURAR / AFP PHOTO / HOCINE ZAOURAR

Turkey has banned six international banks from betting against its stock market in the latest in a series of moves against foreign investors engaged in short selling, Financial Times reported.

Borsa İstanbul said Barclays, Credit Suisse and Merrill Lynch (part of Bank of America) would be subject to a three-month ban on short sales of shares listed on its exchange after failing to comply with a requirement to notify the authorities about such trades.

The bourse added that Goldman Sachs, JPMorgan and Wood & Co, the specialist emerging markets investment bank, would face a one-month restriction for the same reason. 

The move risks compounding concerns among foreign investors that Turkey has adopted an increasingly hostile approach to overseas fund managers, especially those looking after short-term portfolios sometimes classed as “hot money.”

In 2019 authorities launched an investigation into JPMorgan after the bank published a report that advised clients to short the lira.

In May, as the currency hit a new record low, Turkey’s banking regulator briefly froze UBS, Citibank and BNP Paribas out of its foreign exchange market. The regulator said that the decision to ban the trio was taken after the banks failed to settle their lira liabilities on time.

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