Turkish Dollar Sales Blow Past Records With Support for Gas Firm
(Bloomberg) -- Turkey sold a record amount of dollars from its reserves to support its state gas company in December, adding to the biggest currency interventions by the central bank since at least 2002.
The central bank in Ankara sold around $3.4 billion to Boru Hatlari ile Petrol Tasima AS, known as Botas, the most in data going back to 2013, as increasing global energy costs and a weak lira took their toll on the firm.
The support for Botas came on top of about $7.3 billion that the central bank sold to prop up the lira in five direct interventions in the foreign exchange market during the same period.
Turkish authorities unrolled a series of measures to support the lira as the currency weakened to historic lows throughout December, fueled by fears that President Recep Tayyip Erdogan’s push for lower interest rates would stoke inflation. Erdogan also announced a new type of foreign-currency-linked deposit plan designed to curb rising demand for dollars by local investors.
While the FX-linked deposit program brought a measure of stability to the lira at the end of a chaotic year, the currency isn’t out of the woods yet.
Following a brief rally after Erdogan’s introduction of support measures, the lira lost around 18% over the past two weeks, the biggest slump among major currencies tracked by Bloomberg. It was trading 0.1% stronger at 13.8456 per dollar as of 2:19 p.m. in Istanbul on Friday.
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