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Turkish Lira Jumps as Regulator Curbs Bank Swap Transactions

  • Move deters foreign funds from short-selling, says BlueBay
  • Overnight dollar-lira swap surges to a 15-year high over 34%
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Lira Recovers as Turkey Makes it Harder to Short
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The Turkish lira rallied after the nation’s banking regulator limited lenders’ swap transactions, a move that is likely to deter short-selling in the battered currency.

The Banking Regulation and Supervision Agency, or BDDK as it is known in Turkey, cut the limit on lenders’ swap and swap-like transactions to 25 percent of shareholder equity, from 50 percent. That follows a series of steps by Turkish authorities to stem a slide in the currency to a record low on Monday.