Business Markets

Turkish Lira crumbles on central bank woes, Yen gains

The Turkish lira slumped toward a record low versus the dollar after President Tayyip Erdogan stunned investors over the weekend by replacing the hawkish central bank governor with a critic of high interest rates.

The yen rose against the euro and the antipodean currencies on speculation that Japanese individual investors who have been buying the lira recently for its high rates will be forced to cut losses and close out their positions.

The Turkish lira stood at 8.10 per dollar in early Asia trade, down 11% from its close on Friday. The yen edged up against the euro, the Australian dollar and the New Zealand dollar, boosted by expectations that Japanese retail investors who lost money on the lira will unwind other popular cross yen trades.

The dollar was little changed at 108.89 yen but edged up against the British pound to $1.3833. The euro fell slightly to $1.1885. A decline in risk appetite weighed on the Australian dollar, which fell to $0.7725. The New Zealand dollar also fell slightly to $0.7153.

Sisanda Mpiti.

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