It’s Now Costlier to Hedge Turkey’s Lira Than the Russian Ruble

Currency investors are paying the highest premium in four months to hedge against further losses in Turkey’s lira as they brace for national elections.

The spread on six-month options to sell the lira for the US dollar over those to buy the Turkish currency, known as the 25 delta risk reversals, has widened to 13 percentage points this week. That’s the biggest hedging premium among major emerging-market currencies, a dubious title held previously by the Russian ruble.