The Turkish pound is heading for a bigger rise this year, boosting gains on Friday after the government announced new measures to strengthen the currency and slow borrowing.
The pound rose more than 5% to 16.0956 against the dollar, recording the highest gains among the emerging, with the two-day rally amounting to about 8%.
Meanwhile, the stock market is falling 2.8%, the biggest drop in the last two weeks, mainly due to the losses of export companies.
The country’s banking authorities limit commercial loans to pounds for corporate loans if they hold more than εκα 15 million ($ 890,000) in foreign currency and if the amount exceeds 10% of total assets or annual sales, the banking authority said after markets closed.
This move is one of the most dynamic efforts to support the pound this year by the Turkish authorities, without resorting to raising interest rates.
The initial impact of the new decisions will be “serious” but the measures could ultimately offer short-term relief only when large companies such as exporters reduce their foreign currency exposure in response, Deutsche Bank said.
The pound traded 1.4% higher at 16.6952 against the dollar.
Source: Capital
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