The Turkish lira tumbled more than 4 per cent against the U.S. dollar on Friday, its biggest one-day fall since a currency crisis took hold in August, raising concerns that Turks are buying more foreign cash as ties with Washington deteriorate.
The regulators’ actions are the latest official measures to counter the lira’s sharp decline. The central bank said on Friday it was suspending one-week repo auctions “for a period of time”, a policy tightening move to squeeze market liquidity and support the lira.
A copy of the JP Morgan report seen by Reuters said it saw a high risk that the lira would decline after local elections set for 31 March, recommeding clients to go ‘long’ on the U.S. dollar. Such advice is typical of client notes from banks globally.
BDDK also said it was looking into claims that “some banks” had lead clients to buy foreign currencies in a manipulative and misleading way, and that the necessary administrative and judicial processes would be followed.
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