Turkish Central Bank to increase daily foreign exchange auction

ANKARA – Anadolu Agency

The Turkish Central Bank has announced it will increase the daily foreign exchange auction amount on Sept. 29 to $40 million, from a minimum of $10 million

The Turkish Central Bank has announced it will increase the daily foreign exchange auction amount on Sept. 29 to $40 million, from a minimum of $10 million.

The decision was based on increased volatility in the exchange rates, according to a Sept. 26 statement on the bank’s website.

“Due to heightened volatility observed in the exchange rates, the daily foreign exchange selling auction amount will be increased,” the Bank said.

The Turkish Central Bank started at $10 million in the daily foreign exchange selling auction on July 25. The decision was triggered by the improvement in Turkey’s current account deficit, which has decreased by $16.5 billion to $26.7 billion from January to July, according to the Central Bank.

The value of the dollar compared to the Turkish Lira rose to its highest rate in eight months at 3:30 p.m. on Sept. 25 – at the dollar equal to 2.265TL – after the bank’s decision to hold interest rates steady.

This was considered partially as a result of the U.S.’s new housing sales surging to their highest level in more than six years.

On Sept. 26, the lira-dollar exchange rate was 2.260 at 9:15 a.m. and dropped to 2.258 as of 10:20 a.m.

In January, the lira tumbled to a rate of almost 2.4 to the dollar and 3.23 to the euro. The plunge was viewed as a danger to the Turkish economy, dependent on transactions and loans in dollars and euros.

Turkey’s Central Bank announced in January that it would intervene in the foreign exchange market by selling dollars, after the lira hit another all-time low against the dollar that month.

The Bank sent at least $3 billion into the foreign exchange market to shore up the currency, which had been hitting record lows almost daily during January.

Turkey’s Central Bank on Sept. 25 left its one-week repo rate at 8.25 percent, its overnight lending rate unchanged at 11.25 percent, its primary dealers overnight borrowing rate at 10.75 percent and its overnight borrowing rate at 7.5 percent.