Turkeys lira remained under pressure in Asian trade Tuesday but
markets in the region enjoyed a little more stability after the
previous days turmoil.
Nervous investors are keeping an eye on developments in Ankara
after Mondays bloodletting that saw the lira hit record lows
against the dollar and euro, and equity markets go into freefall on
concerns Turkeys financial crisis could spread globally.
In early Asian trade the Turkish unit was at 6.91 to the dollar
and 7.89 to the euro, well off the 7.24 to the dollar and 8.12 to
the euro seen Monday but still uncomfortably high. The unit is down
about a fifth against the greenback since Friday.
AFP | The lira continues
to face pressure as central bank measures were met with
The crisis has been sparked by a series of issues including a
faltering economy the central bank has defied market calls for rate
hikes and tensions with the United States, which has hit Turkey
with sanctions over its detention of an American pastor.
There was some optimism from news that Donald Trumps national
security advisor John Bolton met Turkish Ambassador Serdar Kilic to
discuss the detention of the pastor.
Traders remain nervous, though, and the central banks
announcement that it would provide lenders with liquidity and lower
the amount of cash they needed to keep in reserve largely
disappointed as it made no clear promise of rate hikes, which is
what most economists say is needed.
Still, Ray Attrill, head of foreign-exchange strategy at
National Australia Bank, was hopeful the crisis will not
Its a large local difficulty, but so far the contagion has been
relatively limited, he told Bloomberg Television.
Were seeing a little bit of signs of contagion within the
eurozone, within the spreads of those government bonds in countries
where the banking sector appears to have the biggest exposure as
far as Turkey is concerned. Youd have to say that Turkey is
On equity markets Tokyo ended the morning 1.2 percent higher as
the safe haven yen eased against the dollar, providing some support
Sydney added 0.8 percent and Seoul was 0.1 percent higher, with
Wellington and Taipei also up.
Shanghai was flat but Hong Kong slipped 0.6 percent.
Emerging market currencies, which took...