Fixed-income traders from Deutsche Bank AG have earnt a $35 million profit in two weeks due to the dramatic fall in the Turkish lira (TRY) over the past few days. According to a report from Bloomberg, sighting people familiar with the matter, on August 10, 2018, the traders made more than $10 million due to the TRY plunging to levels not seen in almost two decades.

The traders at Deutsche Bank work on a desk focused on Central and Eastern Europe, the Middle East and Africa (CEEMEA). In the wake of the financial crisis in Turkey, the team was ready and positioned to profit from any slump in asset prices, the report says.

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The desk is run by Aditya Singhal, who has been leading the team since the end of 2016. According to people familiar with the matter, collectively the desk has made around $135 million this year. The team trades across forex, credit tied to borrowers from the CEEMEA region and rates products.

Turkey’s financial crisis

In the past few days, the TRY has fallen to levels not seen in almost two years. However, the impact has not just been limited to Turkey, with markets across the world feeling the impact. Emerging markets, which Turkey is a part of, in particular, have suffered the most.

The fall in the TRY has sparked a wider trend of investors pulling out their investments in broader emerging markets. This is due to the fear that other countries will go down the same path as Turkey. As a result, the Indian rupee and Argentine peso were particularly hurt by this movement as both currencies hit their weakest levels against the US dollar earlier this week.

The financial crisis in Turkey is the result of the President of the United States, Donald Trump, announcing the doubling of steel and aluminum tariffs on Turkey. This was in retaliation for the imprisonment of an American pastor Andrew Brunson in the country.

In an attempt to protect from losses, many brokers are closing open positions for TRY crosses. Last week, Finance Magnates reported that retail brokerage Alpari had closed its open positions for USD/TRY or EUR/TRY trades. Cryptocurrencies, on the other hand, stand to profit from the ailing TRY. The plunging currency has prompted an increased interest in Bitcoin from Turkish investors.