Sacking of central bank chief ruins Turkey's recovering reputation

By Mariam Meskin
22 Mar 2021

An imminent bond issue from Turkey is looking unlikely, investors say, after the abrupt sacking on Saturday of Naci Ağbal, governor of the central bank, just a day after he had raised interest rates by 200bp. Both hard and local currency bonds have sold off and market participants fear a balance of payments crisis.

By Monday morning, Turkey’s dollar bond spreads had widened around 150bp. Its 2026 bond was trading 190bp wider than on Friday, at a cash price of 92.4, while its 2031 bond was 160bp wider at 88.

Investors have also scrambled to sell local currency holdings. The 10 year lira ...

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