The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend.
div > div.group > p:first-child"> The greenback bought 5.569 lira at around 8:45 a.m. London time on Thursday morning, from a level of around 5.33 lira at the close of trade Wednesday. Reuters data showed it fell by as much as 5 percent during morning trade.
The fall comes on the back of dismal central bank figures revealing a dramatic decrease in international reserves. The Turkish central bank's net international reserves for the week ending March 22 sat at 142 billion lira , showing a near $10 billion drop in the first three weeks of March. These are"approaching mission critical numbers," commented Timothy Ash, a Turkey expert and senior emerging markets strategist at Bluebay Asset Management, in a research note."IMF may well be required post election."
The Turkish currency has undergone a dramatic 24 hours as the government instructed national banks to withhold lira liquidity from the offshore swap market to prevent a steep fall in the lira. The move aims to prevent short selling on the currency ahead of local elections on Sunday that are widely seen as a referendum on Turkish President Recep Tayyip Erdogan. Country analysts and national polls expect losses for Erdogan's AK Party.
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