"For state banks, another round of capital injection may be considered as well.
We no longer expect the regulator to allow dividend distribution from 2021 earnings," writes Ates Buldur, analyst at the Swiss investment bank. "The regulator is likely to redefine the solvency related forbearances in a more favourable way, in case the depreciation pressure on TL continues. read moreĬredit Suisse has taken a fresh look at the sector and even though it says all banks under its coverage "appear comfortable" on the liquidity front, it expects some banks to need capital injections or forbearance measures for capital ratios. The Turkish lira is licking its wounds following this week's historic drop to records lows but despite the apparent calm, local banks will face difficulties. TURKISH BANKS: CAP RAISES ON THE HORIZON? The chart below shows the emerging market currency index (.MIEM00000CUS) holding not far from its end-June highs, while the euro/dollar falls. It’s different for the Turkish lira, which is admittedly a particular case.įOMC meeting minutes reinforced expectations that the Federal Reserve will raise rates sooner than other major central banks. “The early start of a normalization of monetary policy in the emerging markets is currently a great support for the currencies.” Most of them reacted very early to the current inflation risks and have already raised their interest rates, in some cases substantially, they add. “The central banks of the currencies that came under particularly heavy pressure in 2013 also seem to have learned from the episode,” they say. interest rates would plunge many emerging markets into a deep crisis due to a flight of capital, causing the respective currencies to plummet,” according to Commerzbank analysts. They apparently learned their lessons from the 2013 ‘taper tantrum’, when traders dumped Treasuries ahead of the Fed, reducing bond purchases, triggering a jump in U.S. Federal Reserve meeting minutes, and its run is probably not over yet.īut this doesn’t seem to be the case for emerging market currencies, even if they usually are considered more vulnerable in times of U.S.
The dollar is close to its highest since July 2020 against the euro after the U.S. sanctions.ĮM CURRENCIES VS THE DOLLAR: IT'S DIFFERENT THIS TIME?(1259 GMT)
law firm this week that the maker of online slot machines was operating in countries such as Iran, in violation of U.S. Meanwhile travel and leisure index had a bad day, losing 1.15% but this time it can't be blamed on COVID-19 but rather on a single stock: Swedish gaming company Evolution AB lost another 16% following accusations from a U.S. read moreĪnd with yields of euro zone government bonds on their way down during the session, real estate also thrived and the index gained about 1.2%. The group published a better-than-expected first half and raised its guidance. There's also a few stocks that stand out, like France's Remy Cointreau, up a whopping 13.4% and lifted by China's thirst for Cognac.
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