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1w USD/TRY Implied Vols Remain Elevated Ahead of Local Elections

TURKEY
  • The Constitutional Court rejected an application by opposition lawmakers, who argued that FX-linked deposit corporate tax exemptions that were introduced to encourage companies to convert FX to liras were against the constitution, Bloomberg report. Lawmakers claimed that the exemptions were unfair to companies that didn’t hold FX and said the exemptions hurt the banking system, widened the budget deficit and triggered economic instability.
  • USD/TRY 1w implied vols remain close to multi-month highs printed earlier in the week, with the contract capturing the municipal elections this weekend. President Erdogan’s ruling party will be hoping to win back key cities it lost five years ago, including Ankara and Istanbul. Erdogan will be leading rallies across the nation throughout the week in the run up to the vote.
  • There are no economic releases scheduled for today. Economic confidence and trade balance data will cross on Thursday and Friday, respectively.

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