Turkish lira edges lower on treasury, cenbank support measures

Shafaq News/ The Turkish lira traded slightly weaker on Friday, after the treasury, central bank and other state institutions announced a series of measures to support the economy.

The lira weakened to 17.24 against the dollar in early trade from a close of 17.20 on Thursday.

It had firmed as far as 16.8 on Thursday evening, after the treasury said in a statement that a series of new "solution-oriented steps" would be announced for an economy beleaguered by surging inflation and a sliding lira.

However, it gave up those gains after the measures were announced, including the issue of state enterprise income-indexed domestic bonds to encourage Turks to make savings in lira assets, and the imposition of a new maturity limit for consumer loans.

Separately, the central bank said banks will maintain additional lira long-term fixed-rate securities for foreign currency deposits/participation funds as a complementary step to increasing the weight of lira fixed-rate securities in the collateral pool that becomes effective on June 24.

"The aim of this regulation is to increase the effectiveness of the monetary policy within the scope of the liraization strategy," it said.

It also raised the reserve requirement ratio for lira-denominated commercial cash loans to 20% from 10% earlier.

Source: Reuters