Turkish bond funds experience biggest weekly selloff this year – Lipper data

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.

Global money market funds get highest inflows in 13 weeks

Global investors put more cash in safer money market funds in the week ended March 24, on resurgent worries over coronavirus infections and fresh lockdowns in some parts of Europe.

Global money market funds received inflows of $42.6 billion in the week, the biggest in 13 weeks, data from Refinitiv Lipper showed.

Meanwhile, equity funds received inflows of $23.2 billion, a 34% decline compared with the previous week, and bond funds got $6.94 billion, a 17% drop.

During the week, investors were also spooked by other concerns, such as U.S. and European sanctions over China, the abrupt dismissal of Turkey’s central bank chief and the cost of infrastructure spending and potential tax increases to pay for President Joe Biden’s $1.9 trillion relief bill.