Turkish Lira falls to record, defying efforts to stem the slide

Turkish Lira falls to record, defying efforts to stem the slide
Date: 7.5.2020 11:00

Turkey’s lira weakened to an unprecedented low against the dollar, despite concerted efforts by authorities to keep a lid on depreciation.

email Print zoom+ zoom-
The lira fell 0.7% to 7.2496 per dollar on Thursday, pushing past the level it reached during the country’s 2018 currency crisis, before paring its decline. It has dropped almost 18% this year, the fourth biggest loss in emerging markets.
Thursday’s fall to near 7.27 pushed it beyond the record low hit during a 2018 currency crisis and extended five sessions of declines as the country sought to mitigate the economic impact of the outbreak, which has killed 3,584 people in Turkey.
It later recovered ground after the banking watchdog announced a ban on lira transactions by BNP Paribas, Citibank and UBS, saying the banks were unable to fulfil Turkish lira liabilities in due time.
The state-owned Anadolu news agency had earlier reported that the watchdog was launching legal action against London-based institutions it said had mounted a “manipulative attack” on the Turkish lira.
The lira TRYTOM=D3 stood at 7.1500 at 1244 GMT, firming 0.7%, having weakened as much as 1% to 7.2690. It has lost some 18% this year under pressure from the COVID-19 pandemic, with more than 130,000 cases in Turkey.
Market concerns had been stoked by comments from a Federal Reserve policy-maker, which traders interpreted as ruling out a Fed swap line to cushion Ankara’s depleted reserves.
Turkey’s Finance Minister Berat Albayrak voiced optimism in a conference call with investors on Wednesday about sealing a swap line deal for forex funding, but he gave few details, several participants in the call told Reuters.
Heading for its second recession in less than two years, Turkey has asked the U.S. Federal Reserve and other central banks for access to funds as its own net foreign currency reserves have fallen to around $28 billion from $40 billion so far this year, reaching as low as $25 billion two weeks ago.
Data on Thursday showed the Turkish Central Bank’s gross forex reserves stood at $51.46 billion as of May 1, down from $52.66 billion a week earlier.
A Fed policy-maker - asked on Wednesday about extending swap facilities to Turkey and others in need - said the Fed already has lines with countries that have a relationship of “mutual trust” with the U.S. and the highest credit standards.


Milli Gazete Puplication Group All Rights Reserved © 2000-2016 - Can not be published without permission ! Tel : +90 212 697 1000  /  Fax : +90 212 697 1000 Software Development and System Support: Milli Gazete