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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
TURKEY
- Turkey's 5Y CDS stands +34bp higher today, surging towards a new YTD high in line with March levels when Agbal was dismissed as CBRT Governor by Erdogan for hiking rates too aggressively.
- Back in 2018, the introduction of tighter policy and lira liquidity measures helped curb TRY depreciation and passthrough to inflation and expectations causing the snowballing crisis, but not before the 5Y CDS soared to 574.4.
- Against a backdrop of rising core US yields and a firmer USD, Turkey finds itself in a precarious position going into 2022 with roughly 60% of its short-term liabilities held in foreign currency.
- With risks to TRY depreciation compounding and no major moves from the CBRT yet to offset the declines, the risks are unequivocally skewed to the upside for Turkey's 5Y CDS.
- Moreover, when we consider pressures from the opposition for early elections ahead of the July 2023 date amid declining support for Erdogan – this adds further risks of domestic and geopolitical instability in 2H22 and additional upside risks to the sovereign risk premium.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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