Turkish banks ease currency turmoil by selling $8B: Bloomberg
Emblem of Turkish Central Bank can be seen at its headquarters, in Ankara, Türkiye, Nov. 8, 2024. (AA Photo)
The sharp decline of the Turkish lira following the market’s opening on Wednesday was interrupted as Turkish banks allegedly sold $8 billion to meet surging demand for foreign currency, Bloomberg reported.
Turkish lira depreciated by more than 12%, marking its largest-ever decline against the U.S. dollar, euro, pound and gold at 7 a.m. GMT. However, losses abruptly narrowed to 6%, fueling speculation that the Turkish central bank may have intervened by selling reserves to counter intense demand pressure.
According to the information obtained by Bloomberg from an anonymous official regarding the matter, the intervention was carried out by multiple banks to prevent Turkish lira’s depreciation.
Reuters also reported that some bankers estimate the central bank sold at least $5 billion in foreign currency on Wednesday, while others suggest the figure may have climbed to $10 billion by the end of the day.
Turkish markets tumbled on Wednesday as political tensions escalated following the early-morning detention of Istanbul Mayor Ekrem Imamoglu, with the BIST 100, the benchmark index of the Istanbul stock exchange, plunging more than 7%.
