Turkish markets continue up as risk recedes
Currency risk has fallen precipitously since last month’s referendum
Turkey’s stock market continued to rise as risk melted away in the aftermath of last month’s constitutional referendum. As gauged by the implied volatility on 3-month options on the USD-TRY exchange rate, Turkish currency risk has fallen back near the level that prevailed last October before the lira plunged. There is an evident inverse relationship between the price of the ETF that tracks the Turkey MSCI Index (TUR) and currency volatility.
Speaking in New Delhi, President Erdogan emphasized the need to alleviate pressure on the exchange rate. India’s President Modi observed that Turkish companies can participate in India’s ambitious infrastructure plans, including the construction of 22 million new houses by 2022.