Turkey's Central Bank to 'use all tools' to reduce currency volatility

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Following the sharp increase in the US dollar and Euro, Turkey's Central Bank has said that it is ready to use "all available instruments to reduce the excessive volatility in the markets."

In a written statement, the bank said that fiscal and monetary policies had been successful in containing the effects of the novel coronavirus pandemic on the economy and maintaining the productive capacity in Turkey.

"Fiscal and monetary policies succeeded in containing the effects of the pandemic on the Turkish economy and maintaining the productive capacity. Recent data suggest that economic recovery has gained pace," said the statement.

It said that with economic activity returning to normal as of early August, current targeted additional liquidity facilities would be phased out.

"Meanwhile, price developments in the markets are being closely monitored. The Central Bank will use all available instruments to reduce the excessive volatility in the markets in line with the price stability and financial stability objectives," it added.

Turkish lira fell to 7.30 against the dollar at 5:40 p.m. local time, past the previous low of 7.26 in May.

It had briefly traded at 7.07 to the greenback in the morning, up from Wednesday's close of 7.03.

The lira stood at 8.67 against the euro in the mid-day trade, also a record high. Early in the day, the euro/lira exchange rate stood at 8.41, versus 8.38 at the previous close.

(EKN/VK)