Lucrative Lira Bets Are at Risk of Unraveling as Oil Shock Hits Turkey

A lucrative bet on the Turkish lira is coming under strain as a surge in oil import bills threatens to accelerate the currency’s slide.

Bank of America Corp. and Barclays Plc are among the banks that recently ditched their bullish lira positions, signaling concern about the fallout from the Iran war, now in its third month. The shift puts at risk the lira carry trade — a strategy in which investors borrow in low-yield currencies to buy higher-yield assets — that has been a hot emerging-markets’ bet for almost three years.