Late on Friday afternoon, just as the market was closing and news of the Turkish coup spread, Turkish ETFs tumbled and the Lira dropped the most in 8 years on investor concerns about the future of the country, and a spike in social media reports that local depositors were - understandably - pulling their money from banks, potentially sparking a bank run. The Turkish Lira losses added to its woes after having slid 20% last year; the currency has now lost more than 40% of its value since the end of 2012.
And while the (allegedly staged) coup has been put down, questions remained about the stability of the Turkish financial system. Which is why early today, Turkey's central bank held an extraordinary meeting with bank executives to discuss ways to minimize the market impact of the coup attempt. The bank convened members of the Banks Association of Turkey, and shortly after announced a series of steps which, comparable to the post-Brexit reaction, sought to stabilize risk assets.
In a terse, 7-bullet statement released today, Turkey's central bank - already scheduled to announce its rate decision this Tuesday - vowed to provide "unlimited liquidity" to banks, while Deputy Prime Minister Simsek said nation's macroeconomic foundations remain "solid." This is what the TCMB announced:
The following measures have been taken for the efficient functioning of markets:
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