Turkey Money-Market Funds Face $2.9 Billion Push Into Lira Bonds
- Money market funds needs to allocate 10% to lira bills
- Market regulator set February deadline to buy lira debt
Electronic boards display Turkish lira rates at currency exchange bureaus in Bodrum.
Photographer: Moe Zoyari/BloombergTurkey’s new requirement for money-market funds to allocate at least 10% of their portfolios to government bonds is set to channel billions of liras into Treasury debt, driving up demand for the short end of the yield curve.
Given that such funds have combined assets of 1.18 trillion liras, the mandate means they will need to allocate about 100 billion liras ($2.9 billion) to government bonds. Currently, the securities make up less than 2% of the portfolios, according to Tufan Comert, global markets strategy executive director at BBVA in London.