Timeline of Turkey's Efforts to Stop the Rot and Defend the Lira
(Bloomberg) -- An economy in recession and swings in the lira have kept Turkish authorities busy for much of this year.
The focus has increasingly shifted to defending the currency, even raising concerns that the government is inching closer to capital controls as it takes on a larger role in managing the market. Investors are unconvinced: the Turkish currency is still this year’s worst performer in emerging markets after Argentina’s peso.
Here’s a rundown of the recent measures taken by Turkish authorities to restore calm:
| May 21 | The central bank effectively rolls back a limited tightening of monetary policy it delivered this month |
| May 20 | The banking regulator tells lenders to wait one day before settling some large foreign-currency purchases. Some of the nation’s primary dealers have also been asked to buy more government bonds in debt auctions |
| May 15 | Turkey reintroduces a 0.1% tax on some foreign-currency transactions in a move to prevent speculation in foreign exchange and bolster budget income |
| May 9 | The central bank ceases to provide liquidity at its cheapest rate of 24% by suspending one-week repo auctions |
| May 9 | The central bank lowers the amount of foreign currency commercial lenders are required to park at the regulator as part of their mandatory lira reserves and increased requirements for foreign-currency liabilities |
| May 6 | A new swap is introduced by the central bank that will allow it to bolster its international reserves by borrowing gold from commercial lenders |
| April 8 | The central bank resumes offering funds to commercial lenders through its one-week repo auctions at 24% |
| March 26 | Turkey makes it difficult for foreign investors to sell the lira by pressuring local banks not to provide liquidity to foreign fund managers who wanted to bet against the lira |
| March 22 | The central bank suspends its one-week lira repo auctions after the lira led a retreat among its emerging-market peers |
| March 21 | Data reveals that the central bank has drawn down its foreign-exchange reserves in March, leading to speculation it’s trying to prop up the lira before municipal elections and prompting a market selloff |
| Since 2018 | Banks were told not to compete too aggressively against each other to attract lira deposits, guidance that was meant to keep borrowing costs from surging but instead led savers to keep more money in foreign currencies |
| Since 2018 | The Treasury has been suppressing its local-currency borrowing to keep yields in check |
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