Turkey's Central Bank intervenes in forex markets

ANKARA

After seeing "unhealthy" price formations in fluctuating foreign exchange rates, Turkey's Central Bank on Wednesday said it had intervened in the market through selling transactions, said a bank statement.

Following the move, the Turkish lira gained as much as 6.27% against the dollar, reaching 12.65 after earlier hitting a historic low of 14.05.

The bank also said it had started to conduct transactions at the Borsa Istanbul Derivatives Market (VIOP).

The Central Bank’s previous direct foreign exchange intervention came in January 2014, with a sale of $3.15 billion.

Official reserve assets of the Central Bank rose to $123.9 billion at the end of October, a 2.2% jump from the previous month, according to official figures.

Recent interest rate cuts by the bank have been followed by drops in the value of Turkey’s currency, the lira.

On Nov. 23, the bank issued a statement criticizing the forex fluctuations as “unhealthy price formations … that are unrealistic and completely detached from economic fundamentals.”

With the latest cut, the bank has lowered its benchmark rate 400 basis points since September.​​​​​​​