Turkish lira declines as Turkish election approaches

The lira declined to 5.6750 against the dollar on Friday, a week after recalling the currency crisis that hit the country last year, while the Turkish authorities blocked lending money to foreign institutions.

The government of the President Recep Tayyip Erdogan put pressure on the Turkish banks on Wednesday to prevent them from lending the pound to foreign financial institutions, in a move that led to higher cost of foreign borrowing in Turkish currency for more than 1000% overnight according to al-Arabiya.

The central bank has taken a series of measures to support the Turkish lira this week, including blocking the available liquidity for local currency from the London market.

Prior to the municipal elections on Sunday, the Turkish central bank took a series of measures to support the lira this week, while bankers said that a new step was taken on Thursday, raising total sales cap in local currency swaps to 30% from 20% for undeserved trades.

The Turkish lira lost about 30 percent of its value last year because of the wrong policies of Turkish President Recep Tayyip Erdogan and his involvement in the crises of the region, which has led to high unemployment and inflation in the country, and this is a challenge to Erdogan and his party, the Justice and Development Party, in the municipality's elections to be held on Sunday. 



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