Turkish Market Turmoil: Lira Slides Amid Global Rate Decisions

Emerging market currencies stagnated as the dollar retained strength. Turkish assets underperformed due to political unrest and economic policy changes. Despite global rate decisions, U.S. shares dipped over economic slowdown concerns, with emerging markets showing resilience. Triple witching added volatility as significant options expired.

Emerging market currencies took a hit on Friday as the dollar maintained its strength, concluding a week dominated by various global interest rate decisions. Turkish assets were especially affected, dropping further following Wednesday's market turbulence.

Turkey's stocks fell for a fourth consecutive session, down 7%, while long-dated international dollar bonds dropped over one cent. The lira steadied at 38 after reaching a historic low of 42. This came after Turkey's central bank raised its overnight lending rate to 46% in an unexpected move, signaling a tighter monetary policy.

The detention of Istanbul's mayor, Ekrem Imamoglu, the main opponent to President Tayyip Erdogan, intensified the pressure on Turkish assets. Concurrently, other emerging market currencies remained mostly flat, as the Fed maintained its rates.

(With inputs from agencies.)