Todayâ€™s move follows the Central Bank of the Republic of Turkeyâ€™s (CBRT) 100-basis-point increase in the FX reserve requirement earlier this month
Todayâ€™s move follows the Central Bank of the Republic of Turkeyâ€™s (CBRT) 100-basis-point increase in the FX reserve requirement earlier this month in a move that also included a lowering of the upper limit of foreign exchange banks could use as part of their reserves at the central bank.
As a result of the May 9 increase in FX requirements, US$3 billion of FX liquidity was withdrawn the market.
On May 9 CBRT also suspended its one-week repo auctions â€œfor a period of time,â€ effectively raising its lending rates by 150 basis points as banks would have to obtain funds via overnight rates that are above the benchmark repo rate at 24.0 percent.
On May 21 press reports said the central bank had started to offer funds at 24.0 percent through repo actions.
After plunging in August last year and then rebounding September through January this year, Turkeyâ€™s lira has faced fresh pressure since February a combination of the threat of U.S. sanctions, uncertainty over local elections, and continued questions over the central bankâ€™s independence and commitment to fighting inflation.
Today the lira was trading at 6.05 to the U.S. dollar, down 12.7 percent this year following last yearâ€™s 28 percent .
On April […]