Turkish Lira Rebounds as Erdogan Warns Bankers Will Be Punished


© Bloomberg. A selection of Turkish Lira banknotes sit on a table in this arranged photograph in London, U.K., on Thursday, Dec. 13, 2018. Photographer: Simon Dawson/Bloomberg

(Bloomberg) — The Turkish lira rebounded, recouping some of Friday’s losses, after President Recep Tayyip Erdogan warned that bankers deemed responsible for speculating against the currency would be punished.

“If you are soaking up foreign currencies from the market and engaging in provocative actions,” there will be “a heavy price for that,” Erdogan said on Sunday in televised remarks during an election rally in Istanbul.

The lira rose 1.3 percent to 5.6819 versus the dollar as of 8:39 a.m. in Singapore. The currency plunged more than 5 percent on March 22, its biggest drop since last year’s crash.

“There wasn’t any follow-through lira selling versus the yen in early Tokyo trade, which probably encouraged some investors to buy back the lira after Friday’s slump,” said Hironori Sannami, an emerging-market currency trader at Mizuho Bank Ltd. in Tokyo. “The liquidity is thin and that probably made it a volatile move.”

Turkey started an investigation into JPMorgan Chase & Co (NYSE:). and another probe of unspecified banks that the regulator reproached for stoking the lira’s drop.

The Banking Regulation and Supervision Agency, known as BDDK, on Saturday said a research note a day earlier by two JPMorgan analysts that recommended selling the lira against the dollar had “misguiding and manipulative” content that resulted in volatility in markets and hurt the reputation of Turkish banks. The Capital Markets Board began its own investigation on similar grounds, according to a statement on its website.

The rebound in the lira contrasted with a risk-off mood in most Asian currencies that were trading on Monday.

“The Turkish lira’s comeback will be limited however as EM in Asia will be under pressure following the price action across markets on Friday,” said Jeffrey Halley, senior market analyst at Oanda Corp. in Singapore.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Comments

comments