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Lira Swaps to Wean Banks Off Foreign Funding, Official Says

Lira Economy Following Opposition Win For Istanbul Mayor
Photographer: Miguel Angel Sanchez/Bloomberg
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A Turkish central-bank swap facility launched this week is designed to reduce the banking system’s reliance on foreign markets, according to a senior official with direct knowledge of the matter.

The long-term currency swap auctions will serve as an additional source of lira liquidity for banks, the official said, asking not to be named while discussing policy. Currently, lenders have to tap foreign investors to help bridge a mismatch between their hard-currency liabilities and lira assets.