Turkey Seeks Dollars With 0% Lira Funding, Return Guarantee

Turkey is working on a plan to attract inflows of hard currency by offering lira funding, free of interest and with a guaranteed 4% return in dollars, to foreign investors willing to park their money for at least two years.

Under the plan, the central bank would provide lira liquidity to foreigners for investment in local bonds with a maturity of at least two years, according to a person with direct knowledge of the deliberations. Besides extending zero-yield swaps, the monetary authority would also guarantee a 4% return in dollar terms when the securities mature, the person said.