NEWS Finance        05/05/2020

Turkish Central Bank increases swap limit to 40%

Turkish Central Bank has raised forex-lira swap market transaction limits to 40% from 30% for swap transactions that have not matured.  This move, which has come two weeks after the Bank raised the limit to 30% from 20%, was introduced to further support the Bank’s growing need for foreign currency to strengthen reserves and protect the Turkish lira.

 

The Treasury and Finance Minister Berat Albayrak has said that discussions are continuing with trading partners in order to secure swap lines from their central banks, and added that the Turkish Central Bank’s reserves were adequate to meet short-term needs. Gross reserves stood at USD 53 billion as of April 24th.

 

The country's banking watchdog, the Banking Regulation and Supervision Agency (BDDK), in April slashed the limit for banks’ foreign exchange swap, forward and options transactions with foreign entities from 10% to 1% of a bank’s equity in a move to support measures taken to protect financial stability and manage risks raised by the coronavirus pandemic.



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