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Turkish Lira Slides on Ankara Attack

Turkish Lira Slides on Ankara Attack Turkish Lira Slides on Ankara Attack

Turkey’s lira weakened for a second day and bonds slid as bombings in Ankara threatened to ratchet up political tension before elections next month, Bloomberg reported.

The currency declined as much as 1.8%, before trading 0.6% lower at 2.9278 against the dollar, after suspected suicide bombers killed at least 97 people at a peace rally in Ankara on Saturday. The yield on two-year notes jumped the most in two weeks.

The Ankara attack was the deadliest in Turkey’s recent history and has heightened the nation’s political and ethnic tensions already exacerbated by the civil war in neighboring Syria. The lira has plunged 20% this year, the biggest decline after Brazil’s real among 24 emerging-market currencies tracked by Bloomberg, after inconclusive elections in June failed to produce a majority government as security risks escalated at home and abroad.

“Everyone had the political risk in mind, but the latest action comes as a very strong warning,” Apostolos Bantis, a credit analyst at Commerzbank AG in Dubai who covers Turkish external debt, said by phone on Sunday. “Lately we have seen some improving sentiment but the latest attacks are going to reverse this and weigh quite heavily on investor perceptions.”

The yield on two-year lira notes climbed 14 basis points to 10.86 % at 10:56 a.m. in Istanbul and is up 284 basis points this year. The rate on 10-year bonds rose four basis points to 10.33% on Monday. The Borsa Istanbul 100 Index dropped 0.5%.

 

 

Financialtribune.com