Turkey’s lira extended its slide from Thursday after Treasury and Finance Minister Mehmet Simsek emphasized that he favors a free-floating currency regime.
(Bloomberg) — Turkey’s lira extended its slide from Thursday after Treasury and Finance Minister Mehmet Simsek emphasized that he favors a free-floating currency regime.
The lira weakened as much as 2.2% to 25.4804 per US dollar in Asian trading on Friday, according to Bloomberg indicative pricing. The lira was down 0.7% at 25.0827 as of 10:09 a.m. in Istanbul. The Turkish currency is headed for a 16th week of declines, its longest losing streak since 1999.
Simsek, the former investment banker who returned as Turkey’s economic czar this month, emphasized in a Twitter post on Thursday that he favors a free-floating foreign exchange regime.
“Policy framework based on the principles of market economy, free foreign-exchange regime and open economy will ensure significant capital inflow to Turkey,” Simsek wrote.
The steep drop in the currency came amid disappointment over a smaller-than-expected rate rise by the Turkish central bank on Thursday. Turkey’s state-run banks refrained from propping up the lira on the day, suggesting authorities are serious about curbing its interventions in the currency market.
Turkish State Banks Hold off Lira Defense in Policy Shift Signal
The Borsa Istanbul 100 Index, the benchmark gauge for Turkish stocks, rose 2.6%, led by gains for companies that earn revenue in foreign currencies.
Meanwhile investors purchased $9.7 million of New York-traded iShares MSCI Turkey ETF on Thursday as the Turkish currency tumbled. Inflows into the ETF climbed to $25 million this week, the largest figure since May 2019.
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