Turkish Lira Rebounds as Erdogan Warns Bankers Will Be Punished
Bloomberg
Published Mar 24, 2019 21:09
Updated Mar 25, 2019 00:38
Turkish Lira Rebounds as Erdogan Warns Bankers Will Be Punished
(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:JPM). 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.
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Written By: Bloomberg
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