In a month that saw a recovery in global stocks, Turkish stocks fell sharply due to pressures from high interest rates and persistent inflation.
The Borsa Istanbul 100 Index fell by 8.2% in August, becoming the worst performer among global financial markets during this period, according to a report published by the Investing platform.
Turkey has seen a growing outflow of foreign capital, with $2.9 billion withdrawn in the three months to Aug. 16, according to data from the Turkish Central Bank.
According to the platform, this withdrawal reflects growing concerns about the Turkish economy, especially as interest rates remain at 50%, among the highest in the world, while inflation continues to harm corporate profits.
Istanbul-based investment firm ATA expects a 28% drop in net profits for the Turkish companies it tracks this year, highlighting the severe impact of the current economic situation.
Burak Cetinkir, fund manager at Strategy Portfoy, expressed uncertainty about the future of Turkish stocks, noting that the full impact of negative factors on the market will not become clear until third-quarter earnings are announced.
Other investors shared the sentiment, according to Investing, with Barings Asset Management reducing its exposure to Turkish stocks over the summer. The firm noted that current share prices already reflect the shift toward conventional monetary policy and remained cautious about the possibility of further market downturns.
As the Turkish lira continues to weaken, it has reached record lows against major currencies. The lira is currently trading at 34 to the US dollar and 37.7 to the euro.
While the price of gold in Turkey witnessed a slight decrease, as a gram of gold is traded at around 2,760 liras, down by 0.15% on the day.
