Turks sell foreign currency

Bloomberg

The transactions help explain the $7.6 billion in net errors and omissions recorded in the current-account balance for October, a spokesman for the Bank in Ankara said yesterday, speaking on customary condition of anonymity. The October figure was the largest in at least ten years and prompted the Bank to investigate the heavy currency traffic in the month.

The lira lost 25 percent of its value in the first 22 days of October as the global crisis prompted a sell-off of higher-yielding emerging market assets. It rebounded 10 percent in the remainder of the month.

Foreign currency deposits with the banking industry fell about $13.6 billion in the month as customers exchanged their dollars for lira, according to Bank data.

The Central Bank estimates that the $5 billion in foreign exchange held outside the banking system was exchanged. A further $1.5 billion or $2 billion may have entered the country from abroad in response to a government offer to waive the majority of tax on repatriated assets, the spokesman said.