Insider Economy Turkish lira drops more than 1 pct, other currencies weaken

Turkish lira drops more than 1 pct, other currencies weaken

Emerging-market currencies slipped on Wednesday, with Turkey’s lira resuming its slide, while stocks were little changed, propped up by Chinese shares.

The lira fell 1.2 percent to give back some of its 8.2 percent gains over the past two days, when local banks acted to support the currency. Losses by Turkish stocks matched the currency’s weakness.

“We saw a rebound earlier this week with the central bank basically stepping in, offshore funding being very expensive to short the Turkish lira,” said Bernd Berg, portfolio manager and global macro strategist at Woodman Asset Management.

“There seems to be actions by the authorities to prevent the lira from falling ahead of local elections this week.”

A spike in lira implied volatility and bond yields since Friday reflected weak investor sentiment towards Turkish assets, just a few days before this weekend’s local elections .

MSCI’s index of emerging-market currencies was 0.1 percent lower. Its developing-world stocks index was little changed.

Data showing Chinese industrial profit fell the most since late 2011 spurred hopes of further stimulus, sending local stocks higher and weakening the yuan.

Stocks on the Shanghai Composite rose 0.9 percent. Chinese blue-chips gained a 1.2 percent.

Russia’s rouble weakened and local stocks dropped 0.3 percent.

“The rouble is weakening along with other emerging-market currencies because of risk aversion on the global market,” said Konstantin Kostrub, head of treasury at ING Eurasia bank in Moscow.

In emerging Europe, the Hungarian forint slid 0.4 percent against the euro, after a nominee to the central bank’s deputy governorship said there was no drastic inflationary pressure in the economy.

South Africa’s rand lost 0.2 percent while Johannesburg-traded stocks rose 0.7 percent, continuing to recover from Monday’s decline, its lowest close in more than a month.

Argentina’s peso plumbed new lows overnight as concern about high inflation and political uncertainty weakened confidence in the economy.

“At the moment I am not positive on the Argentine peso,” said Woodman’s Berg.

“I think there is election uncertainty in coming up later this year. (Cristina de) Kirchner is probably coming back to run for election … you have to be really careful at the moment with the Argentine peso.

(Reuters)

Top Stories

273 new cases of COVID-19 our of 57,926 tests announced on Friday

The Health Ministry announced 273 new Coronavirus cases out of 57,926 PCR and rapid antigen tests on Friday, 5 March, taking confirmed infections to...

Very few COVID-19 confirmed cases found among students

The Health Ministry today carried out antigen rapid tests to the staff and students of private and public schools. In total 10,147 have been tested...

Niki Zarou files lawsuit against Yiolitis, Republic of Cyprus

Following the cancellation of the search warrant of her house in the case of the parody account on Twitter, under the title “Lady Emily...

Where to get a rapid test on Saturday, 6 March

Aiming at the continuous surveillance of the community and the workplaces, the free programmes of rapid antigen testing of the general population and employees...

The EU will never accept a two-state solution for Cyprus, Borrell underlines

Turkey and the Turkish Cypriot side must stay away from the rhetoric for two states in Cyprus, because such a form of a settlement...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...