Turkey's lira slips to record low, stocks tumble

LONDON - Turkey's lira hit a record low and its stock markets tumbled on Monday as a major earthquake added to pressures from a strong dollar, geopolitical risks and surprise inflation readings out of the country. The lira slipped to 18.85 in early trade before retracing most of its losses. The country's main equities benchmark dropped as much as 4.6% with banks tumbling more than 5% before paring some losses with key indexes down between 3.4-5% by 1310 GMT. Yields on local 10-year government bonds rose to as much as 10.2% - their highest in nearly two months. "The tragic events with southern part of Turkey being hit by a powerful earthquake is source of additional uncertainty ahead of crucial elections that most likely are going to be held in May," said Piotr Matys, senior FX analyst at In Touch Capital Markets. More than 1,400 people were killed and thousands injured on Monday when a huge earthquake of magnitude 7.8 struck central Turkey and northwest Syria early in the morning, followed in the afternoon by another large quake. Borsa Istanbul announced a temporary halt to transactions in shares of several companies in the earthquake zone in the early morning, though added more names to the list as the day progressed. Emerging markets are under pressure more widely with currencies and stocks across the developing world feeling the pain from a sharp dollar rally on Friday in the wake of a strong U.S. jobs report, suggesting the Federal Reserve could stay hawkish for longer. But Turkey is feeling additional pressures. Turks beset for years by soaring inflation and currency crashes will likely head to the polls in May for presidential and parliamentary elections - perhaps the most consequential in the century-long history of the republic. Many international investors have quit in recent years amid recurring market turmoil and Ankara's embrace of unorthodox economic and monetary policies, including cutting interest rates in the face of soaring inflation. Geopolitical tensions have been on the rise again recently with indications that the United States would push for a harder line on Russian sanctions enforcement adding to pressure on Turkish markets after Washington warned Ankara about the export to Russia of chemicals, microchips and other products that can be used in Moscow's war effort in Ukraine. Recent inflation data also raised concerns, said Tatha Ghose, FX analyst at Commerzbank, pointing to Friday's annual reading coming in at 57.68% in January - well above forecasts despite a favourable base effect. "Last week's Turkish CPI print turned out to be somewhat of a shocker, re-igniting volatility in USD-TRY which had otherwise been conspicuously been absent in recent months," Ghose said. "A new window of FX volatility could be around the corner." (Reporting by Karin Strohecker, additional reporting by Bansari Mayur Kamdar, Azra Ceylan; Editing by Toby Chopra, Emelia Sithole-Matarise and Kylie MacLellan)

Turkey's lira slips to record low, stocks tumble

DISCOVER MORE

Kenyan shilling weakens, liquidity up as interbank market activity rises

Dollar steadies in uneasy market calm

Russian rouble weakens as tax payments end

South African rand slips as local market awaits rate decision

Pressure builds on Egypt to devalue currency further

Indian rupee drops against UAE dirham as oil prices firm up

Safe-haven dollar sluggish as banking fears ebb; yen drops

Pressure builds on Egypt to devalue currency further

Five African cities hold more than 50% of continent's private wealth

AI may affect 300mln full-time jobs: Goldman Sachs

Maldives airport temporarily shut down after Flydubai aircraft suffers tire burst on landing

Real GDP growth in the GCC region will slow to 3.5% in 2023

UAE approves 24 national initiatives to double re-export industry

Lebanon to sell unlimited US dollars to prop up collapsing pound

Lebanon announces 'open' selling of U.S. dollars at rate of 90,000 pounds per dollar

India cbank may let rupee weaken past 83/USD amid global banking turmoil

Lebanese pound hits historic low of 100,000 to dollar

Kenya shilling eases on energy sector dollar demand

LATEST VIDEO

VIDEO: Why is China's Belt and Road Initiative facing setbacks?

ZAWYA COVERAGE

UAE President appoints Abu Dhabi Crown Prince, deputy rulers

Middle East, Asia-Pacific airfares surge 53%, pose threat to recovery of aviation sector - ACI

DP World develops edible oil terminal at Port of Berbera

Maldives airport temporarily shut down after Flydubai aircraft suffers tire burst on landing

Dubai’s branded home market posts exponential growth

'The march continues': Sheikh Mohammed congratulates new UAE Vice-President, Abu Dhabi Crown Prince

Ruler of Abu Dhabi issues decree restructuring Abu Dhabi Executive Council

DFM introduces 'Omnibus Accounts' to enhance market access

Portugal's rents hit record high amid cost of living crisis

THE BRI REPORT

China is reshaping the Belt and Road Initiative ahead of a post-pandemic era

DISCOVER MORE

LATEST VIDEO

ZAWYA NEWSLETTERS

ZAWYA COVERAGE