The Turkish lira and stocks slid on Friday, hit by global risk aversion and market doubts about the wisdom of the central bank's interest rate cut a day earlier and the effectiveness of steps taken to bolster the currency. The central bank cut reserve ratios on foreign exchange deposits by 0.5 percent in a move that was seen adding $930 million in additional liquidity to the market.
It also held the first of the forex selling auctions announced on Friday, but the market was disappointed that the bank only offered to sell $50 million. Viewing the sum as evidence of a lack of commitment, investors responded by selling the lira. The lira closed at 1.7326 to the dollar in interbank trade, off a morning low of 1.7480, but still weaker than Thursday's interbank close at 1.7250. The main Istanbul share index closed down 5.16 percent to 56,265.52 points, underperforming the emerging markets benchmark index which fell 3.25 percent. Istanbul stocks are now 20 percent below their April 4 high. Turkish equities were down for a sixth straight day.
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