Turkey Central Bank attempts to ward off short-term carrying bets | Einsmark news

(Bloomberg) -Chand policymakers take steps to repel and push the so -called “hot money” flow into the lira against one of the world’s most profitable currency laws. While the central bank kept a close rein on the lira market and gradually slipped the currency, traders say that the market movements have become less predictable lately. On recent Fridays, according to the Bloomberg calculations, the Lira has weakened three to four times faster than the average rate. The accelerated Friday decrease underestimates a popular short-term strategy that liras buy late Thursday via over-the-breeding to earn the weekend, and then leave the post on Monday. An exaggerated Friday drop in the lira could make that weekend bets unprofitable. With the interest rates of the central bank nearly 50%, Turkey again has become an attractive destination for so -called transport traders, which borrow funds in countries where interest rates are low and invest in the assets of countries where rates are higher. Officials have tried to ward off the shortest term trades, for fear of an increase in volatility if they are quickly averted, according to people who are familiar with the case, who asked not to be mentioned about internal policy. This happened in March, when the currency dropped 10% in a matter of hours after the mayor of Imamoglu Mayor the Mayor of Istanbul, the most formidable political competitor of President Recep Tayyip Erdogan, who has been controlling Turkey for more than 20 years. The seller is largely powered by foreign investors leaving their lira positions, Finance Minister Mehmet Simsek said at the time. “Authorities are not very eager to draw the influx of the trade in the short term,” said Erkin Isik, chief economist at QNB Bank in Istanbul. “They saw the wide swings in the exchange rate and FX reserves amid rapid outflow of those trades,” he said. The central bank declined to comment. Goldman warns the world’s best transportation against the threat of Lira Slide The sale of In March is eventually contained with a resumption of interest rate hikes, new measures aimed at reducing lira liquidity, and an increase to assess requirements for short-term requirements abroad. A broader uptick in appetite for emerging market assets also helps after US President Donald Trump put some of his most aggressive trading tariffs on the break. While the lira is still losing value against the dollar, the government has pursued a policy of actual appreciation, which means that the loss of consumer inflation is under the rate of consumer inflation. With the monthly inflation expected to delay, policymakers have made the rate of real appreciation more difficult to measure. The Turkish central bank chief defends interventions to strengthen lira since the steep decline on March 19, Turkey’s lira is further 3.3% against the dollar. The trade remains profitable. The yields for the lira in May were the largest since 2021, which compensated the loss of March, according to a Bloomberg measure based on the one-month forwards. Carrying -upbags are approximately $ 3.4 billion since April 18 until last week, according to calculations by independent Turkish economist Haluk Burumcekci. The trade now provides profits for a fifth consecutive quarter, a winning line that took place in 2012. But it is usually driven by short-term capital inflows, or hot money, and very short-term bets-which often do not last more than a week, according to traders who spoke on condition of anonymity. Morgan Stanley, Deutsche Bank AG and Ing Group NV recently renewed their recommendations for positioning in Lira-denominated vehicle, while HSBC advocated to buy long-term currencies. -With help from Ugur Yilmaz. (Add the move to Turkish lira in the 10th paragraph.) More stories like this are available on Bloomberg.com © 2025 Bloomberg LP