Baku. 26 June. REPORT.AZ/ Foreign investors massively sell assets in Turkey due to increase in discount rate expectations of US Federal Reserve System (FRS) as well as political uncertainty.
Report informs, foreign investors in Turkey carried out sale of stocks and bonds worth 875 million dollars on June 12-19. However, the total assets of foreign investors reached 4.7 billion dollars in 2015.
As a result, Turkish lira (TRY) has weakened by 12%, return on bonds in developing countries has made the fastest progress. This is the fastest cash withdrawal from Turkey in last 10 years.
Given that the financial markets in Turkey received 22 billion dollars in 2012 the capital inflows are likely to continue for a while yet.
Due to expectations to increase the discount rate by FER since September 26 billion dollars withdrawn from financial system in developing countries in 2015. Turkey's political risk more accelerating the flow of funds. It is not excluded that political parties in Turkish parliament which still unable to build new government can go to early elections.
This, in turn, could weaken the already troubled economy of the country.