The Turkish lira came under renewed pressure on Friday after three days of gains and ahead of next week's holiday in Turkey that will mercifully see local stock markets close.
Over the past several sessions, the currency recouped some of last week's harrowing losses thanks to a $15 billion investment promise from Qatar, some ostensibly soothing rhetoric from Berat Albayrak and a crackdown on swaps which paradoxically weighed on equities.
“The recent limitations on swap and swap-like transactions have led a lot of funds in search of lira,” a trader at BGC Partners Securities in Istanbul told Bloomberg on Thursday, as stocks fell more than 3% in Turkey for the second consecutive session. The implication there is that funds were dumping stocks to raise lira. Volatility on the Borsa Istanbul has exploded to levels last seen during the coup attempt.
(Annotating the lira's wild week)
The Borsa Istanbul is down more than 7% for the week. That makes this week the third-worst week since the coup attempt.
Meanwhile, Turkish banks are an unmitigated disaster. Have a look at the Borsa Istanbul Banks Index, which had its worst day since 2006 earlier this week:
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