October 16, 2019 / 8:27 AM / 8 months ago

Jump in lira FX swap rates jogs memories of big spring squeeze

LONDON, Oct 16 (Reuters) - Turkish one-week lira FX swaps jumped to 20.25% on Wednesday, as a flurry of measures by the country's authorities to limit market volatility revived memories of a freeze orchestrated on lira trading back in March.

The leap in the swaps rates tested a 2-1/2 month high hit earlier in the week and came after media reports that Turkish authorities had advised some local banks against offering lira liquidity in the offshore London money-market.

The move had echoes of the squeeze put on offshore markets back in March, when a bid to stamp out sharp volatility in the lira, sent the cost of borrowing in the Turkish currency in swaps markets soaring past 1,000 percent.

"It reads like a warning that if the lira sells off again that the liquidity could be squeezed," said TD Securities emerging market strategist Izidor Flajsman. (Reporting by Marc Jones; editing by Tom Arnold)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below