Turkish State Banks Step In to Boost Lira Ahead of Central Bank Rate Meeting

Turkish state lenders sold dollars to support the lira as the currency’s gradual decline continued ahead of the central bank’s rate meeting.

State-owned lenders sold over $500 million on Monday to meet local demand, according to traders who asked not to be identified because they are not authorized to speak publicly.

The lira has been falling for three consecutive weeks, marking its longest losing streak since June 21. The currency slipped 0.2%, trading at 33.7495 per US dollar as of 5:57 p.m. in Istanbul.

The move comes ahead of the central bank’s rates decision Tuesday. The monetary authority is expected to leave its policy rate unchanged at 50%, according to a Bloomberg survey of economists.

Read more: No Respite for Turkey’s Economy as Rates Set to Stay at 50%

The central bank leveraged growing interest in Turkish assets to bolster its foreign exchange reserves in recent months. However, during the global market volatility in early August, demand for foreign exchange picked up once again.

Turkey’s state banks don’t comment on their interventions in the foreign-exchange market.