The rand remained under pressure in early afternoon trade on Friday, after sinking as much as 2% against the dollar, leaving it within a hair’s breadth of the symbolic R14 to the dollar, the worst level since late November. Turkey was the buzzword, after its lira plunged to a fresh low, dragging other emerging-market currencies along with it. While the diplomatic spat between Turkey and the US was widely cited as the trigger for the meltdown in the value of the lira, a Financial Times (FT) report suggesting that the European Central Bank (ECB) was concerned about some of the region’s banks’ exposure to Turkey added a new twist to the Turkish story. The lira has lurched from one crisis to another since at least the second quarter amid perceptions of a political interference in the running of the country’s central bank. At the time, the Turkish woes contributed to poor sentiment towards emerging markets, leading to net bond outflows of R29.59bn in June alone, according to JSE data.

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