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How has Turkey halted a currency slide?


Jon Steeler

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Investors in Turkey are starting to panic as the country has made it nearly impossible for investors to sell the Lira, in turn avoiding a currency slide that could affect the current president before local elections.

Many investors have lira trades on that they may want to exit but are unable to as Turkish banks are restricting liquidity in the currency in order to halt the same slide that happened last June. According to Bloomberg foreign investors have been trying to get out of Turkish holdings since last week but are unable to as local banks are under pressure not to provide liras therefore restricting the ability to sell the currency. On top of that the cost of borrowing the currency has surged further reducing liquidity and investors trying to sell off the lira are struggling to find buyers  which in turn is driving up the rates.

So far the plan has worked as the currency gained 3.8% on Monday.

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