Turkey Lira Bets Show Central Bank Expected to Stay Hawkish
- New central bank governor said subduing inflation a priority
- Lira swaps reflect expectations of higher borrowing costs
A selection of Turkish Lira banknotes.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
Derivatives tied to the Turkish lira are signaling growing expectations for tighter monetary conditions.
The currency’s three-month overnight indexed swap, used to bet on future borrowing costs, rose to 47.50% on Tuesday — extending a move since former New York Federal Reserve economist Fatih Karahan was installed as central bank governor on Saturday after the departure of Hafize Gaye Erkan. The six-month contract showed a similar uptick.