Investors sold $29.2 million from Turkish lira-denominated bond funds in the week ended March 24, the biggest weekly net selling this year amid market turmoil sparked by central bank governor Naci Agbal’s exit.
A total of $26.2 million was also pulled from equity funds invested in Turkey, the sixth consecutive week of net selling, the data from Lipper showed.
Turkish assets endured a torrid few days after Agbal was ousted by President Tayyip Erdogan last weekend and replaced by Sahap Kavcioglu, a former lawmaker who appears to share Erdogan’s view that high interest rates cause inflation.
The Turkish lira plummeted around 10% after Agbal’s departure, some Turkish dollar-denominated bond prices dropped to their lowest in 10 months, and Istanbul-listed shares logged their worst two days since the 2008 crisis.
Agbal became an investor darling after his appointment in November by resisting Erdogan’s perceived meddling in monetary policy and his repeated calls to cut interest rates. [Reuters]