Central Bank intervenes in ‘unhealthy’ FX pricing
The Turkish Central Bank intervened in foreign exchange markets for a third time this month on Dec. 10, citing “unhealthy price formations.”
“The Central Bank of the Republic of Turkey directly intervenes in the market via selling transactions due to unhealthy price formations in exchange rates,” said the bank.
Following the bank’s announcement released amid fluctuating foreign exchange rates, the Turkish Lira recovered against the U.S. dollar from 13.95 to 13.75.
After the lira fell to the all-time low of nearly 14 against the dollar last week, the Central Bank intervened twice in the market by selling the greenback.
The Central Bank announces foreign exchange interventions to the public on the same day, while the exact figures are usually published in 15 days.
Most emerging market currencies fell on Dec. 10 ahead of a U.S. inflation reading that could prompt the U.S. central bank to tighten policy and raise interest rates at a faster pace.
MSCI’s indexes of emerging market (EM) currencies dropped by 0.3 percent.
The Turkish Central Bank’s Monetary Policy Committee will convene on Dec. 16 to decide on its key interest rates.
According to polls, most economists expect the bank to lower its policy rate by 100 basis points to 14 percent although the inflation rate exceeded 21 percent