In a move aimed at curbing recent volatility in the currency markets, the Turkish central bank announced Thursday that it would begin Turkish lira-settled foreign exchange forward selling transactions.
This new move is designed to help maintain a stable foreign exchange market, prevent sudden currency swings and ensure steady liquidity.
"The Central Bank of the Republic of Türkiye will start conducting Turkish lira-settled foreign exchange forward selling transactions to ensure the sound functioning of the foreign exchange market, prevent possible volatilities in exchange rates and stabilize foreign exchange liquidity," the bank said in a statement.
The decision comes in response to recent volatility in the Turkish lira, with the aim of boosting confidence in the financial system.
On Wednesday, the Turkish lira slid by as much as 12% to a new low of 42 per dollar before recouping most of the day's losses, as authorities detained Istanbul's mayor on charges including corruption and terror links.
It closed at 37.665 per dollar, a 2.6% decline and was last trading at around 38 on Thursday at 12:50 p.m. local time (9:50 a.m. GMT).
"Everything necessary for the healthy functioning of the markets is being done," Treasury and Finance Minister Mehmet Şimşek said on social media platform X on Wednesday.
