@zerohedge does not understand what's going on in Turkey. The last thing Turkey wants is foreign capital returning.
Offering a 4% two year bond is just a stop-gap for those that paying higher rates than that, to offset some cap. outflow.
1/
zerohedge.com/markets/after-…
I've explained this before. Erdogan is de-dollarizing. And he Keynesian assumption of a linear response of inflation to interest rates is a very poor one. 2/
tomluongo.me/2021/12/23/is-…
Now, let's turn to the issue of the day. Russia's gas for rubles trade it is forcing on the world. Gazprombank builds up euros/dollars/etc. foists the FX costs off on the buyer. Ruble demand rises. 3/
Gazprombank has no interest in holding USD/EUR/GBP so they set up a swap with Turkey to pass them through and stabilize FX reserves at 4%
/4
Those Lira can then be offset, hedged, a carry created, etc. With all of them in a bear market dynamic vs. the RUB, Russia is now going to double dip on the returns as the TRY stabilizes.
Those USD/EUR/GBP will pay for Turkey's stabilization. 5/
Using depreciating EUR to buy oil/gas to sell to Turkey at 4% which accelerates the payoff rate of foreign currency debt in Turkey, which feeds the doom loop of FX weakness vs. Russian exports to 'unfriendly' countries. 6/
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