EM Turkeys Lira Make Strong ComeBack from AllTime Lows


Turkeys lira rose almost 1 on Monday, while an index of emerging market currencies was set for the best monthly performance this year, with the South African rand looking to post its biggest monthly rise in a year.

MSCIs index of EM currencies marked its fourth straight session of hitting a new alltime high, with volumes low owing to a market holiday in the United States and Britain.

It was up for the seventh straight session the longest such streak since midFebruary. On the month, the index was up 2, the biggest gain since November last year.

Turkeys lira made a strong comeback, up almost 1, from alltime lows. Data on Monday showed Turkeys economy grew a morethanexpected 7 yearonyear in the first quarter, as pandemic restrictions did not temper hot retail sales, exports and manufacturing.

But, given Turkey had to impose a fresh lockdown in the second quarter due to the pandemic, the first quarter is already out of date, said Commerzbank analysts.

Still, markets do not doubt that output growth will rebound strongly again in Q3… Yet, the liras disastrous longterm track record of the past ten years was established against this positive growth background, they said.

The lira is one of the worst performing EM currencies this month, down 2. The currency is seen as more vulnerable to shocks due to policy missteps and diminished central bank credibility.

South Africas rand rose 0.3 on Monday, taking the monthly gain so far to about 5.5, the best among major EM peers…


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