Central Bank intervenes in FX markets again

ANKARA

The Turkish Central Bank on Dec. 17 intervened in foreign exchange markets for the fifth time in a month, citing “unhealthy price formations.”

“The Central Bank of the Republic of Turkey directly intervenes in the market via selling transactions due to unhealthy price formations in exchange rates,” said the bank.

Before the announcement, the Turkish Lira hovered around a record-low of 17 to the U.S. dollar.
In the afternoon, the lira/dollar exchange rate receded to 16.80.

The Central Bank announces foreign exchange interventions to the public on the same day, while the exact figures are usually published in 15 days. However, the volume of previous interventions by the bank are estimated at about $4 billion, according to media reports.

The bank on Dec. 16 cut its benchmark one-week repo rate by 100 basis points from 15 percent to 14 percent, in line with market expectations.

Meanwhile, Turkey’s short-term external debt stock totaled $125.5 billion as of end-October, the Central Bank said on Dec. 17.

Foreign debt due to be paid over the next 12 months increased by 9.9 percent compared to the end of 2020.

In this period, banks’ short-term external debt stock fell 1.1 percent to $56.7 billion, while other sectors’ short-term external debt stock rose 20.3 percent to $42.7 billion.