Turkey's Central Bank intervenes to aid falling lira

Central Bank of Turkey takes precautionary measures on weakening lira as it falls on increasing possibility of early elections

Photo by: Reuters
Photo by: Reuters

The heightened chances of an early election upon failed talks on the formation of a coalition government in Turkey led the Turkish lira to depreciate, taking the dollar lira index up to 2.84 against the US dollar on Friday.

Turkey’s Central Bank was quick to take action to support the weakening lira with a slight adjustment. The bank says it has reduced the foreign exchange deposit short term interest rate from 3 percent to 2.75 percent for dollar deposits, a move which relieved some of the pressure on the lira.

The Turkish lira fell to a two month low against dollar after the meeting between Turkey’s prime minister and leader of the AK Party Ahmet Davutoglu and CHP leader Kemal Kilicdaroglu ended with a low possibility of a coalition government on Thursday.

TRTWorld and agencies