New Economy Forum
Plummeting Lira Defies Turkey's Surprise Monetary Tightening
- Central bank forces lenders to a more expensive funding rate
- Lira leads losses in emerging markets; stocks and bonds fall
Turkish lira foreign exchange rates at a currency bureau in Istanbul.
Photographer: Kostas Tsironis/BloombergThis article is for subscribers only.
Turkey’s central bank announced a surprise tightening of monetary policy and moved to calm concern over a sudden drop in official reserves in a failed attempt to stem a slump in the lira.
The currency tumbled as much as 5.8 percent Friday as the central bank announced steps to push lenders toward its more-expensive overnight borrowing facility. It was 4.9 percent lower at 5.7457 per dollar as of 8:23 p.m. in Istanbul.