{"id":11210,"date":"2015-08-18T08:39:58","date_gmt":"2015-08-18T13:39:58","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11210"},"modified":"2015-08-18T08:39:58","modified_gmt":"2015-08-18T13:39:58","slug":"more-trouble-in-turkey-as-lira-plunges-to-new-lows-bond-yields-soar","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11210","title":{"rendered":"More Trouble In Turkey As Lira Plunges To New Lows, Bond Yields Soar"},"content":{"rendered":"

More Trouble In Turkey As Lira Plunges To New Lows, Bond Yields Soar<\/a><\/h3>\n

On Monday, Turkey\u2019s lira plunged to new lows against the dollar as coalition talks between prime minister and AK Party leader Ahmet Davutoglu and nationalist MHP leader Devlet Bahceli\u00a0broke down<\/a>. The result, AKP won\u2019t be able to form a coalition government after elections in June saw the party lose its parliamentary majority for the first time in 12 years.<\/p>\n

In the absence of a coalition, the country will go back to the polls – likely in November – where President Recep Tayyip Erdogan hopes heightened violence between Ankara and the PKK will translate into a stronger showing for AKP.<\/p>\n

The political turmoil, rising violence, and general EM malaise have hit the country\u2019s currency hard and on Tuesday,\u00a0Turkey’s central bank left rates unchanged prompting further weakness in the lira which had already fallen earlier in the session after<\/strong>\u00a0Emine Nur Gunay, Davutoglu’s chief adviser, hinted that a rate hike was not in the cards.<\/strong><\/p>\n

\"\"<\/a><\/p>\n

Meanwhile, 10-year yields have spiked to their highest levels in nearly a year and a half.<\/p>\n

\"\"<\/a><\/p>\n

As Bloomberg reports, the market is also not impressed with the central bank\u2019s plan to stabilize markets in the face of policy normalization in the US:<\/p>\n

\n
Investors sold Turkish assets, sending TRY to record low after central bank published \u201croad map\u201d of measures it said would prepare country for normalization of global monetary policy.<\/em><\/strong><\/div>\n

List of 9 technical adjustments fell short of investor expectations that Turkey\u2019s central bank would move toward simplifying monetary policy framework<\/em><\/p>\n

TRY fell as much as 0.9% to record 2.8941\/USD; 2Y yields surged to the highest in more than a year at 10.59%<\/em><\/p>\n

\u201cThe strategic plan is disappointing,\u201d<\/strong>\u00a0Guillaume Tresca, a senior emerging market strategist at Credit Agricole wrote in e-mail<\/em><\/p>\n

Central bank is \u201cjust trying to justify saying to the markets that it\u2019s ready to face a Fed rate hike, without really announcing anything new\u201d<\/em><\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

More Trouble In Turkey As Lira Plunges To New Lows, Bond Yields Soar On Monday, Turkey\u2019s lira plunged to new lows against the dollar as coalition talks between prime minister and AK Party leader Ahmet Davutoglu and nationalist MHP leader Devlet Bahceli\u00a0broke down. The result, AKP won\u2019t be able to form a coalition government after […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[8254,8253,122,8255,431,1908,818,839,4318],"class_list":["post-11210","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ahmet-davutoglu","tag-akp","tag-central-bank","tag-devlet-bahceli","tag-interest-rates","tag-recep-tayyip-erdogan","tag-turkey","tag-us-dollar","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11210"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11210\/revisions"}],"predecessor-version":[{"id":11211,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11210\/revisions\/11211"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}