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Turkish Lira Rates Blow Out to 1000% After Currency Intervention

  • Foreign investors short of Turkish currency after dollar sales
  • Blowout shows distortions caused by measures to bolster lira
Turkish Economy As Gross Foreign Exchange Reserves Fall to $51.1 Billion
Photographer: Kerem Uzel/Bloomberg

The cost of borrowing Turkish liras overnight in the offshore market surged to the highest level since March 2019 after heavy interventions late last week drained the supply of local currency.

The overnight forward-implied yield on the lira jumped as much as 1020 percentage points to 1050% on Tuesday as dollar sales executed by state banks, designed to prop up the lira, began to settle after a public holiday.