Investors Bet on 40% Devaluation in Turkish Lira Over Next 12 Months

potency, analysts say. Investors are betting that Turkey's economic problems will mount after the runoff election and President Recep Tayyip Erdogan's temporary financial fixes lose their potency.

Investors Bet on 40% Devaluation in Turkish Lira Over Next 12 Months

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Investors are increasing their bets on the economic woes of Turkey once the run-off election has been completed and President Recep T. Tayyip Erdoan's temporary financial solutions lose their effectiveness.

Forward contracts on foreign exchange show that investors are betting against a 40% devaluation of the lira over the next year. According to S&P Global Market Intelligence's 5-year credit default swap data, the cost of insurance against a Turkey's bonds in foreign currency has increased by a third.

In the last two days, the yields on government U.S. Dollar bonds maturing 2031 have risen above 9.5%.

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