The Turkish lira fell to a two-month low
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The Turkish lira fell to a two-month low on Monday and the country’s credit default swaps jumped amid a tense presidential election battle, while emerging market shares snapped a four-day losing streak. Moscowtimes writes about it.
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Elections in Turkey
Presidential elections in Turkey went to the second round after neither the current head of state, Tayyip Erdogan, nor the opposition candidate, Kemal Kılıçdaroğlu, broke the 50% barrier necessary for victory.
The fall of the lyre
The Turkish lira fell by 0.5% to 19.66 per dollar by 11:28.
The Istanbul Stock Exchange stopped trading after the main stock index fell by more than 6%.
The election results were a disappointment for investors who had hoped for a move to a more conservative monetary policy amid the problems facing the Turkish economy, including rampant inflation, a sharp drop in the lira and devastating earthquakes earlier this year.
“If the opposition candidate were to win outright, you would see an increase in the lira, and this would be based on the assumption that the opposition candidate would return to conservative (monetary) policy, restore investor confidence and attract public and private capital flows” , — said Elliot Hentov of State Street Global Advisors.
The MSCI Emerging Markets Index rose 0.5%.
Exchange rates
The currencies of emerging markets changed little.
The Hungarian forint against the euro decreased by 0.22%, while the Polish zloty added 0.13%.
The Czech koruna in pair with the euro was slow at the level of 23.59.
The South African rand rose 1.6% to 19.04 per dollar, recovering from historic lows hit last week after the worst power outages in history.
Source: Ministry of Finance
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