Reported about 1 year ago
Turkish banks are increasing the perceived foreign purchases of lira-denominated government bonds by engaging in transactions abroad, accessing cheaper lira liquidity abroad then buying back bonds through forward trades. Despite the apparent $8.3 billion in overseas purchases in the last three months, a considerable portion of these inflows are attributed to Turkish banks utilizing foreign branches, highlighting an interesting market dynamic caused by foreign investor holdings and Turkish currency swap restrictions. Foreign investors remain cautious in taking on Turkish bond duration, with their focus primarily on the currency via forward contracts or short-term debt.
Source: YAHOO