Turkish lira hits record low as inflation spooks traders

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A gold dealer counts Turkish lira banknotes at his shop at the Grand Bazaar in Istanbul, Turkey, on August 6, 2020. (REUTERS/Murad Sezer/File Photo)
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Prices of everyday commodities are soaring in Turkey as the country’s beleaguered currency continues its fall, losing 20 percent of its value in the past year despite central bank support measures. (AFP)
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Updated 05 September 2020

Turkish lira hits record low as inflation spooks traders

  • Pressure grows on central bank to tighten credit after intervention fails to halt currency’s plunge

BENGALURU, India: The Turkish lira slipped to a record low on Friday on concerns around stubbornly high inflation, while emerging market stocks tumbled for a third straight session following a tech-fueled plunge on Wall Street overnight.

The lira eased 0.1 percent against the dollar to an all-time low of 7.4541, weakening for the fifth session in a row with pressure growing on the central bank to continue tightening credit a day after data showed year-on-year inflation of 11.77 percent.

The currency has lost about 20 percent this year despite central bank intervention and, along with Hungary’s forint, is among Europe’s worst performing currencies. The forint was a touch lower at 359.53 a euro on Friday as data showed industrial output dropped by an annual 8.1 percent in July.

HIGHLIGHTS

  • Turkish lira slides for fifth straight session.
  • Russian rouble firms ahead of inflation data.
  • EM currencies set for second week of gains.

“The underperformance of these currencies tells us about longer-term prospects: We think it is a template for which currencies would be vulnerable in a more sustained EM FX sell-off,” said Tatha Ghose, FX analyst at Commerzbank.

An index of emerging market currencies inched higher on Friday and was on course for its second straight week of gains due to earlier weakness in the dollar following the Federal Reserve’s new accommodative stance
on inflation.

The Russian rouble firmed for a second consecutive session following a 2.6 percent slide on Wednesday as German Chancellor Angela Merkel said Kremlin critic Alexei Navalny was poisoned. Sources said that the EU was weighing new sanctions on Moscow over the poisoning.

In South Africa, the rand firmed 0.5 percent, but the return of nationwide electricity blackouts this week has kept the currency from making a major headway. State power utility Eskom said it would reduce power cuts on Friday due to lower demand and much improved weather.


Saudi regulator refers investors to Public Prosecution over $346m in suspicious trading

Updated 30 November 2020

Saudi regulator refers investors to Public Prosecution over $346m in suspicious trading

  • The investors were suspected of violating Article (49) of the Capital Market Law

The Capital Market Authority (CMA), announced today, Nov. 30, referring 22 investors to the Public Prosecution over suspicious trading in shares of Dar Al Arkan Real Estate Development Co., and making illicit gains of SAR 1.33 billion ($346.7 million).

The investors were suspected of violating Article (49) of the Capital Market Law and Article (2) of the Market Conduct Regulations, the market regulator said in a statement.

The claim was referred to the Committee for Resolution of Securities Disputes.

This came in line with the CMA’s efforts to protect the market from unfair as well as illegal practices, including deceit, cheating, fraud and manipulation, and to ensure market efficiency and transparency.

Last week, the CMA identified some cases suspected of manipulations, fraud and scam of the capital market rules and its executive regulations, amid the price fluctuations of some stocks, Argaam reported.

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