These EM Currencies Did Not Get The "Taper Is Priced In" Memo

Tyler Durden's picture

As equity markets around the world try valiantly to hold on to yesterday's manufactured gains that 'proved' the Taper is a good thing, few have commented on the consequences that are already being felt. Emerging Market currencies were broadly pummeled overnight with Indonesia's Rupiah tumbling to 5 years lows and the Turkish Lira collapsing 1.9% in the last 2 days (its biggest drop in 4 months) to an all-time low.

  • *LIRA AT LOWEST VS USD ON CLOSING BASIS SINCE AT LEAST 1981
  • *TURKEY CENTRAL BANK TO SELL MINIMUM $50M FOR LIRAS TOMORROW

The Istanbul stock exchange is down 7.3% in the last 3 days (biggest drop in 6 months).

 

EM FX markets are not happy about the taper...

 

With the Lira breaking to a new record low against the USD (and EUR).

  • *LIRA AT LOWEST VS USD ON CLOSING BASIS SINCE AT LEAST 1981
  • *TURKEY CENTRAL BANK TO SELL MINIMUM $50M FOR LIRAS TOMORROW

So when does the Turkish central bank run out of USD?

 

with the Turkish stock index down over 7% in the last 3 days...

 

Charts: Bloomberg