Turkey CDS, money market rates soar after regulator launches bank probes


LONDON, March 25 (Reuters) - The cost of insuring exposure to Turkey's sovereign debt soared to a six-month high on Monday, after the country's financial regulators opened probes into JP Morgan and other banks accusing them of providing misinformation that stoked FX volatility.

Turkey 5-year credit default swaps <CDS) jumped by 27 basis points (bps) to 426 bpd - levels last seen in September in the wake of the summer selloff, data from IHS Markit showed.

Turkish money market rates also surged for a second successive session, with rates for borrowing 1-month funding in 9-month's time and 3-month funding in 9-month's time jumping to over 29 percent.

"With archaic measures of this kind he (President Tayyip Erdogan) will scare away even the last courageous Turkey investor," said Ulrich Leuchtmann, Head of FX & EM Research at Commerzbank in Frankfurt.

"Who would want to invest in a currency that's valuation is only based on fear?"

This article appears in: Stocks , World Markets , Banking and Loans , Politics
Referenced Symbols: JPM

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