While the DOW is down over 150 points going into lunch time, shares of the iShares MSCI Turkey ETF (NASDAQ: TUR) are up 4% so far today in strong price action in part driven by a continued move higher in the Turkish lira, which has rallied against other currency exchange rates as Turkish stocks gained ground on Nov. 19 following an interest rate hike by the nationwide country’s Central Bank.
The lender raised its one-week repo rate – also referred to as its policy rate – by 475 basis points to 15% consistent with market objectives to begin to contain inflation in Turkey.
Additionally, it made a decision to offer all financing through this price, which it defined as its policy that is main price.
The lira rose by around 2.5 per cent contrary to the U.S. dollar as soon as the move had been announced. The U.S. dollar/Turkish lira exchange price stabilized below the 7.60 mark, decreasing by more than 1.3 percent from the close that is past.
The country’s benchmark stock index exceeded 1,300 points utilizing the backing of strong buying, up 0.9 percent from the past close and 1,284 points from prior to the level that is pre-hike.
The hike met market expectations for an increase that will help support the lira and begin to contain inflation in Turkey.
“This was absolutely the right and logical decision,” said Timothy Ash, senior EM sovereign strategist at Bluebay Asset Management in London.
“There is even a chance here of foreign portfolio guys putting money back in and a reversal of dollarization,” he added in an interview with Reuters.
I own a position in the TUR ETF. To get my future market updates get on my free morning stock market email update list by clicking here.
-Mike
