Lira dip raises spectre of currency crisis for Turkey with banks in crosshairs

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By Mariam Meskin, Ross Lancaster
30 Jul 2020

Falls in the Turkish lira have reignited concerns about a currency crisis this week, with the Central Bank of the Republic of Turkey’s (CBRT) unorthodox exchange rate policy raising questions from investors about the robustness of the country’s respected banking sector. Mariam Meskin and Ross Lancaster report.

Since May, the CBRT has managed to keep its currency stable, mostly trading in a TL6.84-TL6.86 range against the dollar. The CBRT has defied foreign investor scepticism during that time, using unorthodox methods such as recycling state banks’ FX deposits to defend the lira’s  exchange rate.

But analysts ...

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