Turkish banks sell $8 billion to stabilize currency

Turkish banks sold approximately $8 billion by midday on March 19 in an effort to stabilize the lira after it plummeted by up to 11 per cent.

The market intervention involved multiple banks, according to sources who requested anonymity due to the matter’s sensitivity, Caliber.Az reports citing foreign media.

Bloomberg records that shifts in domestic affairs typically impact Turkish stocks, as the local equity market is largely driven by domestic investors, who tend to react strongly to volatility. Data from the Turkish securities depository shows that domestic investors hold roughly 62.5% of Turkish equities.

As of 12:45 p.m. in Istanbul, the lira was down 5.5 per cent, trading at 38.8565 per dollar.

The Borsa Istanbul 100 Index dropped 6.9 per cent, leading to a temporary trading suspension. Meanwhile, the benchmark yield spiked by 97 basis points to 29.16 per cent, and the lira slipped 0.4 per cent to 36.8351 per dollar. Turkish stocks tumbled nearly 7 per cent, while 10-year government bond yields surged to their highest level this year, with the lira reaching a new record low.

By Nazrin Sadigova