ISTANBUL: Turkey's lira hovered near a record low on Monday, hammered by domestic political tensions and the US Federal Reserve's decision to start trimming its monetary stimulus programme.
The market also awaited the central bank's announcement of its 2014 monetary and exchange rate policy report due Tuesday, in which it will provide guidance after the Fed decision.
Already under pressure this year by expectations that the Fed would begin to stem a flood of dollars that has boosted global emerging markets, the lira was further beaten down by a police investigation in which dozens of senior businessmen and people with links to the government were detained last week.
Twenty-four people, including the sons of two ministers and the head of state-run Halkbank, have been formally charged in connection with the corruption inquiry last week. Thousands took to the streets of Istanbul on Sunday to protest against the government over the corruption scandal.
Turkey is more exposed to any tightening of the supply of cash globally as it needs to import almost all of the oil it uses, which gives it one of the world's biggest current-account shortfalls and makes it dependent on capital inflows.
Turkish debt insurance costs surged to 3-1/2 month highs of Friday. The yield on the 10-year benchmark bond was at 10.1 percent.
The lira touched an all-time low of 2.0983 against the dollar, first hit on Friday. It stood at 2.0875 by 0747 GMT.
The main stock index fell 0.5 percent to 69,247.34 after sustaining heavy losses last week.
Halkbank said on Monday in a stock-exchange filing it had not faced questioning by the police or judiciary as a corporate entity in connection with the graft investigation and that it had complied with the law and banking regulations. Its shares declined 1.14 percent to 13 lira.
Emlak Konut rose 1.86 percent to 2.19 lira after its officials were released in the corruption probe.
Comments
Comments are closed for this article.