Turkey: Central Bank takes action against weakening of the lira
October 1, 2011
On 30 September, the Turkish lira (TRY) traded at 1.85 per USD, which represented a 5.4% depreciation over the 1.75 TRY per USD tallied on the last day of August. On a year-on-year basis, the lira depreciated 21.4% against the U.S. dollar. The depreciation in part reflects the widening current account deficit. In addition, tensions stemming from the Eurozone debt crisis continue to weigh on investors, who are gradually switching to safer assets and thus contributing to the ongoing depreciation. On 5 October, the Central Bank sold USD 750 million after offering as much as USD 1.35 billion in a daily auction, the largest since daily sales started on 5 August, in order to stem currency depreciation. The Bank stated that ?large amounts? of dollar sales could continue to limit volatility in the value of the lira.