Turkish currency crunch: Examining behavior across investor types
In 2018 a currency crunch occurred in Turkey, accompanied by varied and differential trading amongst investors. We classify investors as foreign or local investors as well as individual or institutional and examine trading behavior and associated returns leading up to, during and after the crunch. We show foreign institutional investor net buying is positively related to future returns over the period while net buying of all other investor groups is negatively correlated with foreign institutional net buying. Further, foreign institutions performed best in timing the exchange rate market, leading to magnified returns. Our results suggest foreign institutions hold informational advantages even outside their home countries.
Journal of International Financial Markets, Institutions and Money
Onuk, Cagri Berk and Fodor, Andrew, "Turkish currency crunch: Examining behavior across investor types" (2023). Kean Publications. 130.