The Turkish lira records the largest weekly gain after a government intervention

Saturday 25 December 2021 09:10
 
Baghdad / NINA / - The Turkish lira recorded its strongest week ever, as it jumped until Friday by more than 50% after state-backed interventions in the market estimated at billions of dollars.

The currency rose for the fifth day in a row and touched its levels in mid-November, where it recorded 10.7 pounds against the dollar yesterday evening.

On Monday, the lira plunged to an all-time low of 18.4 against the dollar, after months of declines due to severe interest rate cuts and concerns about a sharp increase in inflation.

But Turkish President Recep Tayyip Erdogan late Monday unveiled a plan by which the central bank and the treasury would compensate for losses on deposits converted into Turkish lira to protect them from foreign exchange losses.

The lira received great support from dollar sales carried out by government banks with the support of the Central Bank.

And "Reuters" quoted informed sources, including a senior Turkish official, that state banks sold dollars extensively this week, following Erdogan's announcement of his plan.

The Turks did not sell dollars on Monday and Tuesday, according to official data, indicating that they had little role in the massive market gains.

And estimates of dealers showed that the state's intervention in the market cost the central bank more than $8 billion this week.

Under pressure from Erdogan, the central bank has cut the interest rate by 500 basis points to 14% since September, despite inflation rising to more than 21%.

It is expected that prices will rise 30% next year, due to reasons including the depreciation of the lira./End of 9

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