Turkey Dusts Off Lira Playbook as Banks Pressed Before Elections
- Central bank imposes measures, phones lenders to shore up lira
- Repeated rate hikes have failed to stop the currency’s decline
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Turkey’s central bank is tightening its grip on the weakening lira before this month’s local elections, resorting to administrative measures as well as calls to commercial lenders aimed at capping hard-currency purchases.
The monetary authority imposed restrictions on lira-denominated loan growth on Tuesday and sold $475 million in lira-settled foreign-currency forwards, the first time it’s carried out such a transaction since July. The decisions come during one of the worst stints for the lira in months, as rising inflation and falling foreign currency reserves undermine sentiment.