Yigit Bulut, President Erdogan’s senior economic adviser claimed Turkish locals sold USD 7.0 billion in exchange for TL since yesterday.
The advisor also added that the “talk of so-called dollarisation in the economy” was a lie.
Bulut’s interruption follows the TL crash after the sacking of central bank governor Naci Agbal that triggered a massive flee from TL resulting with around 15% depreciation in less than a couple of house as early trade began late Sunday. Fears mounted as the incoming governor Kavcıoglu is positioned to restart immature rate cuts in the coming weeks or months. Heavy state bank intervention on Monday trimmed TL loses down to 8%. The central bank’s next monetary policy council meeting is scheduled for April 15.
Meanwhile interest rates on overnight swaps for Turkey’s lira spiked to 1,400% on Tuesday, Refinitiv data showed, hitting their highest in at least a decade days after the governor shift.
The sharp spike was making it expensive to short the lira, said Tim Ash at BlueBay Asset Management in emailed comments.
“It’s killing people already invested in Turkish lira assets as it makes it so expensive to hedge and reduce exposure.”
There was no evidence that state banks had been instructed by the BDDK bank regulator to cut the limit for Turkish banks’ forex swap, spot and forward transactions to foreign entities as they had been in 2019.
Ahval/Reuters