SEPOCTAPR
16
201720182019
4 captures
16 Oct 2018 - 02 Sep 2020
About this capture
MenuSearch
Sign InSubscribe
Photographer: Kostas Tsironis/Bloomberg
markets
Turkish-American Detente Pays Off as Pressure to Hike Rates Ebbs
By
Constantine Courcoulas
Turkish-American Detente Pays Off as Pressure to Hike Rates Ebbs
By
Constantine Courcoulas
,LISTEN TO ARTICLE
1:25
SHARE THIS ARTICLE
Share
Tweet
Post
Email
Photographer: Kostas Tsironis/Bloomberg
Photographer: Kostas Tsironis/Bloomberg
Such is the relief over U.S. pastor Andrew Brunson’s release that pressure on Turkey to raise borrowing costs is finally abating.
The lira swap market suggests traders are scaling back bets for a large rate increase next week after speculation that Washington and Ankara may patch up relations added fuel to the lira’s rally this month. U.S. Secretary of State Mike Pompeo will visit Turkey on Wednesday, according to Haberturk newspaper.
The one-year cross-currency swap rate fell for a fifth day to below 30 percent on Monday, a level that has mostly held since August, when policy makers unleashed a series of measures leading to a whopping 625-basis-point hike in September. The policy response backstopped the lira after U.S. sanctions on Turkey over Brunson’s continued detention sent the currency into a tailspin.
Brunson at the Izmir International Airport CIP terminal to depart Turkey on Oct. 12.
Photographer: Chris McGrath/Getty Images
While the implied overnight rate on the one-year contract is still around 26 percent -- 200 basis points above the benchmark one-week repo rate -- and inflation has jumped since the central bank’s last meeting, the rally from a record high earlier this month is a sign that investor appetite for lira assets is healthy at these levels.
That’s a godsend for an economy that’s teetering on the brink of a recession, where only last month investors were bracing for higher borrowing costs to help put an end to a year-long rout that has knocked some 35 percent off the currency’s value, and a comfort for the central bank before it meets to set policy on Oct. 25.
Published on
Have a confidential tip for our reporters?
GET IN TOUCH
Before it's here, it's on the Bloomberg Terminal.
LEARN MORE

LIVE ON BLOOMBERG
Watch Live TV Listen to Live Radio
Most Read
  1. business
    Paul Allen, Billionaire Who Co-Founded Microsoft, Dies at 65 October 15, 2018, 8:44 PM EDT
  2. markets
    China May Have $5.8 Trillion in Hidden Debt With ‘Titanic’ Risks October 16, 2018, 4:52 AM EDT
  3. markets
    Tech Stocks, Dollar Fall as Global Tensions Rise: Markets Wrap October 15, 2018, 4:07 PM EDT
  4. markets
    Tech Leads Stock Rally as Company Earnings Roll In: Markets Wrap October 16, 2018, 11:51 AM EDT
  5. markets
    Saudi Arabia Breaks 45-Year Taboo With Veiled Threat to Use Oil as a Weapon October 15, 2018, 7:23 AM EDT
Terms of Service Trademarks Privacy Policy ©2018 Bloomberg L.P. All Rights Reserved
Careers Made in NYC Advertise Ad ChoicesContact Us Help
HomeMarketsTechnologyPoliticsPursuitsOpinionBusinessweekVideoAudioNewslettersWatchlistSubscribeSign inNew Economy ForumWealthCryptoHyperdrivePrognosisClimate ChangedEqualityBillionairesGraphicsSponsored ContentThe David Rubenstein ShowArt + TechnologyInspire GOWhere to Invest $10,00050 Companies to Watch in 2018What's Inside All the iPhonesEconomicsDealsFixed IncomeETFsBenchmarkMarkets MagazineDaybreakSurveillanceMarketsWhat'd You MissTwitterFacebookStocksCurrenciesCommoditiesRates & BondsSectorsEconomic CalendarTrillionsOdd LotsSurveillanceBenchmarkP&L;CybersecurityStartupsAIMobileBig DataCloud ComputingU.S.GlobalThe Elon Musk TrackerTesla Model 3 TrackerGadgets with GurmanDigital DefenseBloomberg Technology TVStudio 1.0DecryptedTwitterFacebook2018 Women CandidatesTrump TrackerBrexit CoverageWorld Leaders on the Brink2018 Pessimist's GuideBloomberg LawBalance of PowerTwitterFacebookTravelAutosHomesLivingCultureStyleLondon Property PricesNew York Property PricesHow to Invest in ArtHow to Spend Your BonusMadeTwitterFacebookInstagramEditorialsTwitterFacebookMasters in BusinessBloomberg Opinion TodayMoney StuffRitholtz's ReadsEarly ReturnsSparklinesSooner Than You ThinkThe Year Ahead: 2018The Bloomberg 50Hello WorldSubscribeTwitterFacebookInstagramUSEuropeAsiaAustraliaSchedule+ShowsSurveillanceDaybreakMarketsWhat'd You Miss?Bloomberg TechnologyAll Shows...QuickTakeHello WorldThe SparkTicTocYouTubeTwitterFacebookListen LiveAbout Bloomberg RadioDecryptedOdd LotsTrillionsBenchmarkMasters in BusinessSurveillanceP&L;Business of SportsCoast to CoastBloomberg LawAll Podcasts…