Turkey’s central bank had reportedly asked its local banks to by the nation’s dollar bonds across maturities to keep borrowing costs stable and also prevent a spike in its CDS, as per sources. Turkey’s 5Y CDS dropped as by 20bp to 669bp, the biggest drop since May 12, after having jumped to above 700bp on election risk. Besides, Turkey’s dollar bonds had recovered some of its losses from the prior week. The incumbent President Erodogan will face his rival candidate Kemal Kilicdaroglu in a runoff vote on Sunday.
Turkey’s recently issued 9.375% 2033s, the on-the-run 10Y has seen its yield move 48bp lower to 10.54% and currently trades at 93 cents on the dollar.
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