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Turkey's Treasury Denies Changes in Foreign Exchange Regime

Updated on
  • Turkey plans to empower Treasury to help protect value of lira
  • Turkey parliament committee to debate government bill Monday

Erdogan on Monetary Policy, Parliamentary Elections

Turkey’s Treasury denied media reports that it planned new changes in the foreign-exchange regime, even as parliament prepared to empower authorities to demand access to foreign currency transaction data.

The Treasury said proposed legislation to tighten protection of the lira -- the second-worst performer in emerging markets this year -- marks a step forward for “a more liberal exchange regime.”

Lawmakers began debating the bill on Monday. They dropped an article that made a reference to the “exchange regime,” and canceled a proposed amendment that would allow authorities to impose fines for submitting misleading information, except in cases of state security, trade secrets or family privacy.

On May 8, President Recep Tayyip Erdogan said the government has projects in motion designed to “reverse the assaults on the economy that are fully carried out through the exchange rates.”

After erasing this year’s advance, emerging-market currencies ended the week in the green as U.S. inflation data reduced pressure on the Federal Reserve to step up monetary tightening. The rout hasn’t eased for the Argentine peso and the Turkish lira, which tumbled as authorities struggle to stem losses. The lira slid 12 percent against the dollar this year.

Read more: What the Lira’s Plight Says About Turkey’s Economy: QuickTake

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