FinanceTurkish lira on 8-day rally as funding hopes offset trading curbs

2020-05-18 15:05

ISTANBUL, May 18 (Reuters) – The lira strengthened for an eighth straight day on Monday and Turkish stocks rose, supported by hopes the government will be able to secure foreign funding amid the coronavirus pandemic even as foreign investors pull back.

Dealers said the currency rallied amid a decline in foreign trading after a series of limits imposed by the BDDK banking watchdog. As a result, lira trading was halted on at least one foreign electronic platform on Monday.

The currency had firmed late last week after a Reuters report that Turkey was in talks with Japan and the United Kingdom on setting up currency swap lines, and with Qatar and China on expanding existing facilities.

The lira, which hit a record low of 7.269 on May 7, strengthened as far as 6.8350 against the dollar, its strongest level since mid-April. At 0828 GMT, it stood at 6.8720, compared with a close of 6.9050 on Friday.

Istanbul’s main share index was up 1.5% after prices were confirmed for expected capital injections at state banks, whose shares rose.

Recent volatility has been driven by concerns over Turkey’s dwindling FX reserves and relatively high foreign debt obligations, and also by the pandemic.

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