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Approval of Sweden NATO Bid, Erdogan Backing of Erkan Boost Sentiment (1/2)

TURKEY
  • The Banking Index pared yesterday’s losses, closing Tuesday’s session 4.48% in the green. Meanwhile, the Borsa Istanbul Index closed the day 1.73% higher, close to the cluster of highs printed around the 8000.00 handle, with Ekonomi noting that the approval of Sweden's entry into NATO may have created some optimism in the short term.
  • USDTRY losses had amounted to as much as 0.5% earlier in the session, potentially owing to comments from President Erdogan making an apparent show of support for CBRT Governor Erkan - who faces allegations over her father’s involvement over central bank matters.
  • While Erdogan did not refer to anybody by name, he criticised “campaigns” and “gossip” which may be a sign that the President is sticking by Erkan, and therefore the Bank’s more orthodox approach to monetary policy. This comes amid market concern over the longevity of Erdogan’s commitment to high interest rates. Nevertheless, the move lower in USDTRY has since faded with the pair just 0.1% in the red at typing.

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