Analysts at TD Securities note that overnight, US Federal prosecutors filed criminal charges against Turkey’s state-run Halkbank for allegedly evading US sanctions on Iran.
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“As an initial reaction, Borsa Istanbul temporarily prohibited short-selling of seven banks. Later in the day, the Turkish regulator reportedly advised some state banks against offering lira liquidity in the off-shore money-market.”
“Given the long shadow cast by a market liquidity squeeze in March of this year, USDTRY has moved lower. Forwards moved temporary higher (ON unchanged, 1w+180bps, 1m+180bps higher) but have retraced slightly.”
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