Turkish stocks tumble as crackdown on lira speculation spooks markets – business live

Cost of borrowing lira overnight surges to 1,000% as Ankara tries to shore up the currencyLira borrowing costs soar amid crackdownAnkara wants to prevent currency fallingForeign investors blocked from shorting liraEarlier:UK retail sales fell in MarchDraghi: Trade war has hurt euro companiesIntroduction: New Zealand surprises with rate cut hint 1.55pm GMT Brad Bechtel of investment bank Jefferies blames Turkish president Erdoğan for the currency market panic.Erdoğan hit the campaign trail last week, ahead of local elections this Sunday. The US dollar/Turkish lira spot rate had kicked off at the end of the week last week on the back of Erdogan’s thrust back into the limelight as he campaigns for local elections. Anytime he gets back on the mic the currency tends to kick off and we’ve had a 7% round trip the last 3 days in spot.Expect the currency to remain volatile throughout this election cycle as the market will take the sentiment in the local elections to be a vote of confidence on Erdogan himself. Also the longer he keeps talking the more we are likely to see these extreme moves. 1.23pm GMT Here’s a good chart showing the surge in the overnight lira swap market:Cost to borrow Turkish liras overnight more than triples in a sign of how money markets have seized up after an apparent bid to stymie foreign short sellers https://t.co/27HDnVkpuk pic.twitter.com/sXlHKZ4CXD Continue reading…
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