Turkey Orders Exporters to Convert 25% of Income to Liras
(Bloomberg) -- Turkey will require exporters to convert a quarter of their revenues to liras, the latest step in the government’s efforts to boost its reserves and support the local currency.
The central bank will buy 25% of all income from exports of goods so long as the exporters receive payments in U.S. dollars, euros or pounds, the monetary authority said in a decree on Monday.
The measure is aimed at boosting Turkey’s foreign currency reserves by forcing companies to keep some of their revenues from sales abroad in the local currency. It comes after a year of severe losses in the lira, which lost nearly half of its value against the dollar last year as President Recep Tayyip Erdogan called on the central bank to lower its benchmark interest rate.
The lira is trading 0.3% weaker at 13.3430 per dollar at 3:54 p.m. in Istanbul, extending losses over the past year to just over 44%, the biggest such slump among major currencies tracked by Bloomberg.
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