President Erdoğan to meet with top economy team to discuss recent lira volatility

ANKARA

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Turkish President Recep Tayyip Erdoğan is set to hold a meeting late on Jan. 16 with top economy officials, including ministers, senior civil servants and Central Bank Gov. Murat Çetinkaya, to discuss the recent volatility in the Turkish Lira and other economic developments, according to sources.

“The latest developments in the foreign exchange rates will be discussed in the meeting,” a source told Reuters. 
The lira has lost as much as 10 percent against the dollar since the start of 2017, making it one of the worst-performing major currencies in the new year.

Meanwhile, the Turkish Central Bank skipped its one-week repo auction on Jan. 16, aiming to boost the lira by reducing the amount of local currency circulating in markets.        

The one-week repo auction – in which local banks borrow lira from the Central Bank – was skipped for the third trading day in row as banks acted to stem the sharp decline in the value of the lira against other currencies.   

On Jan. 12, the lira appreciated sharply against the U.S. dollar following the Turkish Central Bank’s announcement that it would not hold the auction, as well as the general declining trend in the dollar following U.S. President-elect Donald Trump’s announcements. The USD/TRY rate tumbled below 3.81 levels from 3.93 liras in the early hours of the day. On Jan. 16, parity slid to 3.77.

The bank has not held repo auctions since that day, signaling it would continue to skip the practice until volatility in foreign exchange rates calms down.