In a move to provide liquidity amid foreign exchange fluctuations, the Turkish Central Bank lowered the upper limit for its forex maintenance facility on Monday.
According to a bank statement, the move will provide approximately $2.2 billion in liquidity to Turkey’s banks.
"The upper limit for the FX maintenance facility within the reserve options mechanism has been lowered to 45 percent from 55 percent," the statement said.
All tranches were also reduced by 5 points.
With the change in its reserve mechanism, some 6.4 billion liras ($1.5 billion) of lira liquidity will be withdrawn from the market.
The Central Bank’s move comes after the Turkish lira slipped to a historic low against the U.S. dollar, nearly 4.30 as of last Friday.
Last year, one U.S. dollar traded for 3.65 Turkish liras on average, compared with 3.02 in 2016.
By Tuba Sahin