Turkey Joins Global Central Banks Dumping Dollars To Prop Up Currency

Turkey

Photo: AP

Turkey’s central bank is selling $1.35 billion at an auction today in an effort to curb the lira’s decline.  Yesterday, it sold $750 million.These efforts come after the lira fell to a record low of 1.9096 per dollar on October 4, according to Bloomberg.

The central bank said at its monetary policy meeting that the depreciation in the lira would impact the demand for durable goods, especially autos.

Turkey’s central bank recently cut interest rates in light of the weakening global economic recovery.

At the G20 meeting in Washington D.C. late September, finance ministers said, “we reiterate that excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability.”

Emerging markets like Brazil, South Korea, India and Indonesia have all intervened in the currency markets to cull the decline in their currencies.

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