Turkey’s central bank not buying foreign currency – Reuters

Turkey’s central bank is not using recent strength in the lira as an opportunity to buy foreign currency, Reuters reported on Thursday, citing an unidentified bank official.

Some traders said the lira’s rally against the dollar following a rate hike to 15 percent from 10.25 percent last week had opened a window for the central bank to rebuild its depleted foreign currency reserves, Reuters said.

"The central bank is not buying foreign currency," the official said, requesting anonymity, according to Reuters.

Central bank data showed its net foreign exchange reserves, excluding swaps, fell to $16 billion in mid-November, Reuters said. Ratings agency Fitch said last week that the reserves, including liabilities such as swaps, stood at a negative $46.5 billion.

The Turkish lira rallied to as high as 7.5 per dollar following the interest rate decision, but has since lost ground, trading at 7.86 per dollar on Thursday.

The lira had hit an all-time low of 8.58 per dollar on Nov. 6, the day before Turkish President Recep Tayyip Erdoğan sacked and replaced the central bank’s governor.

https://www.nasdaq.com/articles/turkeys-central-bank-not-buying-fx-despite-lira-rally-official-2020-11-26