The Turkish pound is falling for the seventh consecutive session today, while Turkey’s credit risk hedging (CDS) contracts reached their highest level since 2008 earlier, intensifying pressure on authorities to stabilize domestic markets amid a global turn in security.
The pound has fallen nearly 5 percent against the dollar since Wednesday, slipping to its lowest level since December, according to Reuters.
The Turkish currency fell to 15.56 against the US dollar, while at the moment it is moving at 15.47. It has lost about 15% of its value this year, after the fall of 2021 by 44%.
The new dip has led traders to speculate that Turkish authorities are now aiming for a new level, up to $ 15.5 in the dollar, as part of their efforts to stabilize the exchange rate using the central bank’s largely depleted foreign exchange reserves. along with other measures.
The country’s central bank, under pressure from President Tayyip Erdogan, is unwilling to raise its key interest rate from 14% despite a 70% jump in inflation this year.
Turkey’s 5-year credit risk (CDS) contracts, meanwhile, climbed more than 700 points on Thursday, the highest level since 2008, according to Refinitiv.
CDSs have strengthened more than 70 points in the past week, raising borrowing costs for the country. On Friday, however, they fell again below 700 points.
Emerging markets have been experiencing strong upheaval lately as US Federal Reserve interest rate hikes have led to a jump in the dollar.
Source: Capital
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