The Turkish lira fell nearly 8% against the dollar amid persistent investor concerns about Turkey’s monetary policy, which rose more than 50% last week after billions of dollars in market intervention.
The pound also received support last week from the government’s move to cover foreign exchange losses on specific deposits.
The pound fell to 11.6 against the dollar today, before reducing losses to 11.35.
The resistance limit is at 11.45-12 pounds, with support levels at 10.57-10.25 pounds, reports QNB Invest.
Last Monday, the pound fell to a record low of 18.4 against the dollar, after months of falling worries about inflation sparked by successive interest rate cuts, as suggested by Turkish President Recep Tayyip Erdogan to the central bank.
At current levels, the currency remains 35% lower than at the end of last year.
Erdogan unveiled a plan last Monday to compensate the finance ministry and the central bank for losses on pound deposits against foreign currencies, sparking the pound’s biggest intra-conference rise.
According to official figures, the Turks did not sell dollars in large quantities on Monday and Tuesday last week.
Government intervention, meanwhile, cost the central bank more than $ 8 billion last week, according to traders’ estimates.
The central bank sold $ 1.35 billion in direct foreign exchange intervention on December 2-3 to support the pound, when it stood at $ 13.5 against the dollar.
In an interview last week, the Turkish president stressed that Turks had shown confidence in the local currency and deposits had risen by 23.8 billion pounds since the program was announced.
But data from BDDK banking supervisors showed that after a large accumulation of dollars last week, Turkish depositors individually held $ 163.7 billion in “hard” currency, almost unchanged from Monday and Friday, when it formed in the $ 163.8 billion.
The pound received a strong boost last week from the backdoor dollar sales of state-owned banks, backed by the central bank.
Source From: Capital