Lira Slide Becomes One-Way Bet as Traders Test Central Bank
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Shorting the Turkish lira is becoming one of the easiest trades in town.
The wager is simple: the central bank is going to hesitate to defend the currency by raising interest rates given President Recep Tayyip Erdogan’s explicit criticism of high borrowing costs. And that’s allowing hedge funds and other speculators to pile up one-sided bets against the lira as it extends one of the biggest declines in emerging markets this year, hitting record lows against both the dollar and euro.