Turkish Lira at New Low on Ankara-West Tensions

Turkey's lira sank to new lows on Monday as tensions between Ankara and the West combined with unconventional monetary policy and rising inflation. (Getty Images)
Turkey's lira sank to new lows on Monday as tensions between Ankara and the West combined with unconventional monetary policy and rising inflation. (Getty Images)
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Turkish Lira at New Low on Ankara-West Tensions

Turkey's lira sank to new lows on Monday as tensions between Ankara and the West combined with unconventional monetary policy and rising inflation. (Getty Images)
Turkey's lira sank to new lows on Monday as tensions between Ankara and the West combined with unconventional monetary policy and rising inflation. (Getty Images)

Turkey's lira sank to new lows on Monday as tensions between Ankara and the West combined with unconventional monetary policy and rising inflation.

The lira fell more than 2%, closing in on 10 to the dollar - a level it has never hit - after President Recep Tayyip Erdogan said he had ordered the expulsion of the ambassadors of the United States and nine other Western countries for demanding the release of philanthropist Osman Kavala.

Kavala has been charged with financing nationwide protests in 2013 and for involvement in a failed coup in 2016.

Lira volatility gauges jumped, dollar bonds fell, local 10-year yields moved closed to three-year highs hit last week, flirting with the 20% level.

Turkey's tension with NATO allies over Kavala comes amid heightening worries about government interventions in monetary policy, taking 2021 losses for the lira to about 24%, the worst performance among emerging market peers by a significant margin.

"If politicians make foreigners the bogeyman, it is easier to sell the pressures created by the weak lira as the price to be paid for political autonomy. That also means: a monetary policy U-turn seems less likely now. And that is bad news for the lira," said Ulrich Leuchtmann, head of FX and commodity research at Commerzbank.

Turkey's state lenders Ziraat Bank, Vakifbank and Halkbank lowered their loan rates by up to 200 basis points according to the products and maturities, they said in a joint statement on Monday, following last week's central bank policy easing.



Saudi PIF Completes $7 bln Inaugural Murabaha Credit Facility

The Public Investment Fund (PIF) logo
The Public Investment Fund (PIF) logo
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Saudi PIF Completes $7 bln Inaugural Murabaha Credit Facility

The Public Investment Fund (PIF) logo
The Public Investment Fund (PIF) logo

Saudi Arabia's Public Investment Fund (PIF) completed on Monday a $7 billion inaugural murabaha credit facility.
In a statement, PIF said the credit facility is supported by a syndicate of 20 international and regional financial institutions.
PIF head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division Fahad AlSaif said: “This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia”, the Saudi Press Agency reported on Monday.
This financing complements PIF’s successful sukuk issuances over the past two years, the statement added. It also underpins PIF’s strong financial position, as well as its best-practice approach to debt financing.
PIF is rated Aa3 by Moody’s with stable outlook and A+ by Fitch with stable outlook. PIF has four main sources of funding: capital injections from government, government asset transfers, retained earnings from investments, and loans and debt instruments.