Turkey prohibits some banks from carrying out lira transactions

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Turkey has banned BNP Paribas, Citibank and UBS from carrying out lira transactions after the currency reached a record low against the dollar on Thursday, with investors worried about the lack of reserves to protect the economy from the impact of the pandemic.

The low of 7.27 lire per dollar for this session left behind the previous floor, reached during the exchange rate crisis of 2018. The fall of this trading session is the fifth consecutive and occurred while Turkey seeks to mitigate the effects of the outbreak, which killed 3,584 people.

Subsequently, the lira recovered some ground, after the banking sector supervisory body announced a ban on lira transactions by the three banks, saying that they are unable to meet their lira liabilities in due time.

State news agency Anadolu had previously reported that the agency was initiating legal action against London-based institutions, which it said had mounted a “manipulation attack” against the lyre.

At 3:44 pm, the currency was quoted at 7.1079 lire per dollar, a 1.2% appreciation, after falling 1%, to 7.2690 lire per dollar. The exchange rate has lost about 18% this year under pressure from the pandemic, with more than 130,000 cases in Turkey.

Market concerns were further fueled by comments from a member of the Federal Reserve that traders interpreted as discarding a Fed swap line to reinforce Turkey’s diminishing reserves.

Data on Thursday showed that Turkey’s central bank’s gross foreign exchange reserves were $ 51.46 billion on May 1, compared with $ 52.66 billion the week before.

The Fed member – questioned on Wednesday about the extension of swap mechanisms to Turkey and others in need – said the Fed already has lines with countries that have a “mutual trust” relationship with the United States and high standards of credit.

Source: https://www.moneytimes.com.br/turquia-proibe-3-bancos-de-operar-com-lira-enComo-moeda-cai-a-minimas-recordes/

Photo: The low of 7.27 lire per dollar from this session left the previous floor behind (Image: REUTERS / Murad Sezer)

Turkey has banned BNP Paribas, Citibank and UBS from carrying out lira transactions after the currency reached a record low against the dollar on Thursday, with investors worried about the lack of reserves to protect the economy from the impact of the pandemic.

The low of 7.27 lire per dollar for this session left behind the previous floor, reached during the exchange rate crisis of 2018. The fall of this trading session is the fifth consecutive and occurred while Turkey seeks to mitigate the effects of the outbreak, which killed 3,584 people.

Subsequently, the lira recovered some ground, after the banking sector supervisory body announced a ban on lira transactions by the three banks, saying that they are unable to meet their lira liabilities in due time.

State news agency Anadolu had previously reported that the agency was initiating legal action against London-based institutions, which it said had mounted a “manipulation attack” against the lyre.

At 3:44 pm, the currency was quoted at 7.1079 lire per dollar, a 1.2% appreciation, after falling 1%, to 7.2690 lire per dollar. The exchange rate has lost about 18% this year under pressure from the pandemic, with more than 130,000 cases in Turkey.

Market concerns were further fueled by comments from a member of the Federal Reserve that traders interpreted as discarding a Fed swap line to reinforce Turkey’s diminishing reserves.

Data on Thursday showed that Turkey’s central bank’s gross foreign exchange reserves were $ 51.46 billion on May 1, compared with $ 52.66 billion the week before.

The Fed member – questioned on Wednesday about the extension of swap mechanisms to Turkey and others in need – said the Fed already has lines with countries that have a “mutual trust” relationship with the United States and high standards of credit.

Source: https://www.moneytimes.com.br/turquia-proibe-3-bancos-de-operar-com-lira-enComo-moeda-cai-a-minimas-recordes/

Photo: The low of 7.27 lire per dollar from this session left the previous floor behind (Image: REUTERS / Murad Sezer)

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