The Turkish lira is depreciating, despite measures to protect the currency by regulators

- Advertisement -

The Turkish lira fell on Tuesday, as companies in the country continued to buy US dollars for a second day, despite restrictions on commercial lending in pounds to companies that hold high foreign exchange reserves.

- Advertisement -

The pound fell as much as 0.5% to 16.6376 pounds per dollar, after rising 2% on Monday. According to three Bloomberg sources in the field of traders, the willingness of companies to buy dollars has not been affected by the decision of state-owned banks to take measures to defend the local currency.

- Advertisement -

More specifically, central banks sold more than $ 1 billion in two days to support the pound, according to sources. One of them noted that the net impact of this move on the market was small, as there were also opposite trends.

Turkish banking regulators have restricted the granting of commercial loans in pounds to corporate borrowers if they hold foreign exchange reserves in excess of 15 15 million ($ 902,000) and if these reserves exceed 10% of total assets or annual sales of the company. The move was one of the strongest efforts of the Turkish authorities to support the Turkish national currency.

In order not to raise interest rates to curb galloping inflation and the consequent growing willingness to buy dollars, regulators have implemented a series of restrictive measures at various levels from 2018 to date.

Turkey’s central bank has kept its key interest rate unchanged at 14% for the past six months, with consumer prices rising at the highest rate since 1998. Turkish interest rates are in fact the most negative in the world, if the current rate is taken into account. inflation.

The head of Turkey’s Banking Regulatory Authority (BDDK), Mehmet Ali Akben, said the measures were aimed at “ensuring that loans are used properly” and “contribute positively to curbing inflation”, according to the Turkish state news agency. Anadolu.

Source: Capital

- Advertisement -


Please enter your comment!
Please enter your name here

Hot Topics

Related Articles