Turkey Central Bank Tries ‘Fringe Tools’ to Stem Lira Slide
A pedestrian passes the entrance to the Grand Bazaar shopping district of Istanbul.
Photographer: Kerim Okten/BloombergThis article is for subscribers only.
Turkey’s central bank lowered the cost of dollar borrowing for a fourth time this year, seeking to halt the lira’s slide after the breakdown of talks on the formation of a new government sent financial markets tumbling.
The rate for commercial banks’ dollar borrowings was lowered to 2.75 percent from 3 percent, the central bank said Friday. The currency slumped to a record low after President Recep Tayyip Erdogan’s chief adviser said the lira is “competitive” at 3 per dollar, or about 6 percent weaker than Friday’s opening price. Governor Erdem Basci is set to announce the monthly decision for benchmark interest rates next Tuesday.