Turkish Central Bank lowers FX reserve requirement to support lira’s value against dollar

ANKARA

In an attempt to curb Turkish Lira’s plunge, Turkey’s Central Bank lowered the foreign exchange markets reserve requirement limit on Aug. 6.

“The upper limit for the FX maintenance facility within the reserve options mechanism has been lowered to 40 percent from 45 percent,” the Central Bank said in a statement on its website.

“With this revision, approximately $2.2 billion of liquidity will be provided to banks,” it added.

The U.S. dollar was traded for 3.82 Turkish liras on average in the beginning of the current year.

Last week, White House spokeswoman Sarah Sanders said the U.S. has imposed sanctions on Süleyman Soylu, the interior minister, and Abdülhamit Gül, the justice minister, for not releasing American pastor Andrew Craig Brunson, who faces terrorism charges in Turkey.

According to U.S. law, those mentioned on the sanctions list will have their assets and properties under U.S. jurisdiction blocked and American businesses and individuals will be prohibited from engaging in financial transactions with them.

Following the sanctions decision, the U.S. dollar/ Turkish lira exchance rate climbed over 4.90.

While it closed the last week at 5.08, it reached nearly 5.20, by market close on Aug. 6.