Turkish authorities are working to support the development of long-term financing in the lira currency, central bank Governor Erdem Basci said.
Promoting a local corporate bond market is a priority, Basci said today in an interview with Bloomberg Television from Davos, Switzerland.
Turkey’s foreign currency reserves have declined by more than $18 billion from a peak of $94 billion in July last year as the bank sold dollars to stabilize the lira. The currency depreciated 18 percent against the dollar last year, the most among emerging market currencies tracked by Bloomberg.
The exposure of some Turkish companies to borrowing in foreign currencies means that the central bank can’t ignore the exchange rate, Basci said yesterday in Davos. As long as the economy is partly dollarized and companies depend on lending in foreign currencies, central banks need to have some role in managing the exchange rate, he said.
The bulk of the dollars the central bank has sold went to local companies and individuals, Basci said yesterday.