Turkey's banking and capital markets regulators launched an investigation into JPMorgan Chase and other banks over complaints it received after the Turkish lira plunged nearly 5.5 percent on Friday and the main share index fell sharply.
The Banking Regulation and Supervision Agency (BDDK) said on Saturday it received complaints that a report JPMorgan Chase published on Friday hurt the reputation of Turkish banks and caused volatility in financial markets.
JPMorgan Chase recommended investors go short on the lira, targeting a move to 5.90 against the U.S. dollar, citing a recent drop in Turkey's net foreign exchange (forex) reserves for the move. The BDDK underscored that the JPMorgan Chase analysts' note had misguiding and manipulative content which resulted in volatility in markets on Friday. The necessary administrative and judicial processes would be followed, it said.
The Capital Markets Board of Turkey (SPK) followed BDDK's suit and said it had launched a probe after receiving complaints that the JPMorgan Chase report was misleading and caused speculation on the Istanbul bourse.
The Turkish lira tumbled 5.5 percent against the U.S. dollar on Friday, its biggest one-day fall since a currency crisis took hold in August, raising concerns that Turks are buying more foreign cash as ties with Washington deteriorate. The dollar closed the day at 5.76 against the Turkish lira while it reached as high as 5.83 during the day.
The regulators' actions are the latest official measures to counter the lira's sharp decline. The central bank said on Friday it was suspending one-week repo auctions "for a period of time," a policy tightening move to squeeze market liquidity and support the lira. Turkey's main index BIST100 was down 3.45 percent at Friday's close, while the banking index had declined 6.64 percent.
The total forex deposits and funds including precious metals of Turkish individuals hit a record high of $105.74 billion in the week to March 15, data from the Turkish central bank showed on Thursday.