Economy: Turkey’s risk premium exceeds 700 basis points

Turkey which is one of the most important economies in the Middle East (and Europe) has been struggling with major economic issues. In fact, it is reported that the country’s risk premium has risen above 700 basis points, the highest level since October 2022.

As the second round of the presidential elections in Turkey approaches, the moving course on the exchange rate and risk premium side is causing new thresholds to be crossed.

According to Bloomberg, the Dollar /TL in the interbank market saw above the 20 level for the first time, while Turkey’s risk premium also rose above a threshold, at the beginning of the week.

The 5-year credit default swap (CDS) exceeded 700 basis points, reaching the highest level since October 2022.

Prior to the first round of the elections, Turkey’s risk premium had closed at 505 basis points on May 12. After the completion of the first round of the elections, an upward acceleration in the risk premium was observed.