Rand runs as Turkey props up lira with massive emergency rate hike | Fin24
  • Disposal?

    Sasol may be planning to sell its South African coal-mining operations.

  • National Carrier

    Fixing SAA means overcoming an 'organised crime syndicate', says ex-prosecutions boss Vusi Pikoli.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.


Rand runs as Turkey props up lira with massive emergency rate hike

May 23 2018 22:56

The rand strengthened more than 30c from its intraday low to R12.40 to the US dollar after Turkey's central bank hiked interest rates by 300 basis points on Wednesday.

The bank took decisive action to put a floor under the cratering lira currency and win back investor confidence shaken by interventions from President Tayyip Erdogan.

"Emerging market currencies has taken a liking to this and USDZAR is trading back at R12.46 from R12.65 at the open this morning. The lira has reversed all its losses from the day as well," commented TreasuryONE.

By 22:30 in overnight trade in New York the local unit was trading 1.01% firmer at R12.44/$ after trading in a R12.40 - R12.70 band against the greenback on the day.

TreasuryONE cautioned that the euro was still under pressure vs the dollar, trading at €1.1700/$.

The rand started the day on the back foot, partly due to the US dollar rallying overnight and the bleak situation in Turkey.

Speculation was rife that the bank would step in with an emergency rate hike after Erdogan made known his intention to take the wheel of Turkey's monetary policy and ignored calls for an interest rates hike to try and curb the rapid inflation.

With the latest move Turkey's central bank asserted its independence.

"While this situation is far removed from South Africa, the fact that Turkey is also an emerging market brings a blanket view of all EMs, and the contagion effects are definitely in play," said TreasuryONE.  

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

rand  |  markets  |  currencies


Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What's your view on deep sea mining?

Previous results · Suggest a vote