Turkish Lira rout imperils one of the best bets in emerging bond markets
Published 19 Oct,2021 via Bloomberg Markets - The lira’s slump this month threatens to derail a rally in Turkish corporate bonds that’s handed investors some of the richest returns in emerging markets.
The debt, which handed investors returns of 4.4%, in 2021, was the second-worst performer in developing nations, after President Recep Tayyip Erdogan sacked three central bankers last week. As the lira tumbled, the average yield on Turkish company bonds surged to a more than five-month high of 4.82%.
Before then, Turkish corporate borrowing costs had largely resisted the impact of China’s Evergrande Group crisis and rising concern about tapering by the U.S Federal Reserve, which curbed appetite more broadly for riskier emerging-market assets.
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Selcuk Gokoluk