The Turkish lira weakened by an additional 3% on Tuesday, extending the sharp losses seen a day earlier and eroding the huge gains made last week, as concerns over the country’s monetary policy further aggravated the climate in the financially shattered country.
At 12:00 Greek time, the pound was 2.93% lower, at 11.8599 against the dollar, having reached the low of 11.949 earlier. Despite the huge recovery last week, it has lost 37% of its value against the US currency so far this year.
The pound gained more than 50 percent last week after government intervention in the multibillion-dollar foreign exchange market and a move by the government to cover foreign exchange losses on some deposits, bringing the currency back to mid-November. Turkish Finance Minister Nurettin Nebati, however, said in a statement to Erdogan’s interests on A Haber television station on Monday night that TCMB made absolutely no intervention on the night of December 20th, when the pound recovered from an all-time high of 18.41 against the dollar, by 20%.
President Tayyip Erdoγan had just announced a new economic tool to get more people converting foreign currency deposits into pounds, under which the Finance Ministry and the Central Bank will compensate for the losses caused by the large fluctuations of the Turkish currency. estimated period of deposits.
According to a TCMB document sent to banks on Monday, the Central Bank will support these hedged accounts by not applying mandatory reserve ratios to them. It will impose a higher commission on banks where the transfer from forex accounts to pound accounts will not exceed a certain level.
The TCMB’s net foreign exchange reserves, excluding exchanges, are estimated to have fallen by about $ 8 billion last week, with most of the fall in the first two days of the week. They fell by $ 17-18 billion last Friday from the beginning of the month, when TCMB started its immediate interventions.
The same time Opposition says TCMB reserves hover at $ -50 billion.
The Turks did not sell dollars in large quantities on Monday and Tuesday last week, according to official figures suggesting they had played a small role in the profits, which strengthens the argument that Central Bank of Turkey launches a bold “injection”.
In addition, while the opposition is targeting Halkbank with allegations of scandal, Banking Regulatory and Supervision Agency of Turkey files lawsuits against more than 12 people, including two central bankers for manipulating the pound.
Petros Kranias
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Source From: Capital
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