The Turkish Central Bank Intervenes to Limit The Losses of The lira

The Central Bank of Turkey said in a statement that it directly intervened in the market through selling operations due to unhealthy price formations in exchange rates.

The price of the Turkish lira collapsed against the dollar during today’s trading, to reach its highest price at 17.07 during today’s trading, to decline by more than 8%, but the intervention of the Central Bank limited the currency’s losses to trade at levels of 16.5 lira to the dollar.

The dollar has more than doubled in value this year against the lira, disrupting the large emerging market economy.

The central bank cut the interest rate by 100 basis points, in line with expectations, bringing the rate of cut that began in September to 500 points, which reduces the attractiveness of the currency to investors and depositors.

The bank hinted that it would halt the interest rate cut to monitor its repercussions in the next three months.

The central bank is facing pressure from Erdogan to cut interest rates in order to boost economic growth.

The central bank intervened for the fifth time in the currency market in the past two weeks, selling dollars to slow the decline of the lira and erode its already depleted foreign reserves.