© Reuters. FILE PHOTO: People stroll at Mahmutpasa street, a middle-class shopping area, in Istanbul, Turkey May 6, 2022. REUTERS/Murad Sezer
NEW YORK (Reuters) – The cost to ensure exposure to Turkey’s sovereign debt jumped on Tuesday and Turkey’s dollar-denominated bond prices fell a day after President Tayyip Erdogan’s pledge to continue cutting interest rates.
Turkey 5-year credit default swaps added 17 basis points (bps) from Monday’s close to 736 bps, levels last seen during the global financial crisis in 2008, data from S&P Global (NYSE:SPGI) showed.
Bond prices were lower by more than 1 cent for most issues, with the September 2027 bond down 1.05 cents to 96.83 and yielding 9.1%.
Speaking after a cabinet meeting, Erdogan said Turkey will not raise interest rates but rather continue cutting them in the face of high living costs.