Turkish central bank doubles banks’ borrowing limits for overnight transactions

ANKARA

Turkey’s Central Bank said on Aug. 29 it was doubling banks’ borrowing limits for overnight transactions from levels which applied before Aug. 13, when it said it would provide all liquidity the banks needed.

“In the light of recent evaluations, the CBRT has decided that, to be effective from 29 August 2018, the banks’ borrowing limits for overnight transactions at the Interbank Money Market established within the CBRT would be twice the limits applicable before 13 August 2018,” it said in a statement.

The move came after the Turkish Lira weakened as far as 6.4 to the dollar in early trade on Aug. 29, its weakest since Aug. 15. By 0728 GMT, it was at 6.37, according to Reuters data.

The latest Turkish losses came after Moody’s warnings over the banking sector. Moody’s downgraded 20 Turkish financial institutions , saying that a further shift in investor sentiment could curtail wholesale funding for a sector that has borrowed heavily overseas.