| 23 May 2024, Thursday |

Turkey’s lira slips to record low, stocks tumble

On Monday, a significant earthquake added to the pressures brought on by a strong currency, geopolitical threats, and unexpected inflation figures from outside the country, causing the lira to drop to a record low and the stock markets to crash.

Early in trading, the lira fell to 18.85 before recovering most of its losses. The major index for the country’s stocks fell as much as 4.6%, with banks falling more than 5%, before trimming some of its losses by 13:10 GMT, when key indices were down between 3.4 and 5%.

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.

  • Reuters