Bloomberg: The Turkish lira is heading for the biggest monthly loss in October

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10:32 PM

Friday 30 October 2020

Istanbul – (dpa):

Bloomberg News said in a report on Friday that recent financing adjustments by the Turkish central bank could not prevent the lira from falling to a record low, as the currency headed towards its biggest monthly decline since its heavy losses two years ago.

The decision to end the acquisition of the lira from the repurchase market on the Istanbul Stock Exchange was the latest step in the central bank’s attempt to restrict policy and strengthen the Turkish currency without returning to the policy of raising interest rates.

The US agency said that the move to halt financing at an interest rate of 11.75% will raise borrowing costs in the LBP by forcing lenders to rely more on the late liquidity window of the Central Bank.

The lira initially recovered its losses, but quickly resumed its downward trend against the dollar. The currency is at a record low level every day this week, and it decreased by 1%, and the dollar reached 8,3731 Turkish liras by 5.25 pm local time.

In Istanbul, this was the largest decline among its counterparts in emerging markets on Friday, and put it on a path to record a decline of 7.8% this October.

The latest development comes after the central bank surprised investors by keeping the repurchase rate a steady week last week, as the delayed liquidity window increased, a marginal source of lending originally earmarked for emergency financing.

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