The American dollar reached a historic peak against the Turkish lira on Friday as the US Federal Reserve started trimming its monetary stimulus program, and one US dollar was exchanged for 2.0947 Turkish liras.
The Federal Open Market Committee (FOMC), the Fed's governing body, expressed on Wednesday its plans to scale back the monthly bond buying program, which is designed to lower interest rates and boost economic activity, from $85 billion to $75 billion a month starting in January.
These policies reflected on the Federal Reserve’s assessment that the economy is beginning to make progress. "Labor market conditions have shown further improvement; the unemployment rate has declined," FOMC said.
Concerned about the Turkish lira's inflation against the dollar, Turkey's Central Bank announced Friday that, on days when excessive volatility is observed in exchange rates, the amount of foreign currency sales can rise up to ten times that of the predetermined minimum.
The foreign currency sale tenders made by the Turkish Central Bank amount to a minimum of $50 million on regular days, while reaching a minimum of $100 million on volatile days.
With today’s decision, Turkey’s Central Bank will bring more US dollars into Turkish market to decrease inflation, while also earning more money by selling its dollar reserves at a high price.
englishnews@aa.com.tr
