FxWirePro: Turkey's lira at record lows as investors worry over central bank’s reserves
The Turkish Lira plunged to a new all-time low after comments from a Federal Reserve policymaker which traders interpreted as ruling out prospects of the Fed extending a swap line to Ankara. On Wednesday, on asked about …
The Turkish Lira plunged to a new all-time low after comments from a Federal Reserve policymaker which traders interpreted as ruling out prospects of the Fed extending a swap line to Ankara.
On Wednesday, on asked about extending swap facilities to Turkey and others in need, a Fed policymaker stated that the Fed already has lines with countries that have a relationship of mutual trust with the U.S., and the highest credit standards.
Turkey's state banks have injected the market with dollars and the banking regulator has restricted foreign investors’ access to lira liquidity, in concert efforts by authorities to keep a lid on lira's depreciation.
However, investors are concerned about the decline in central bank’s gross reserves, which fell by $20 billion since the start of the year to around $86 billion through the end of April.
USD/TRY is trading 1.1 percent up at 7.2607, having hit a high of 7.2611 earlier.
Immediate resistance is located at 7.2747, any close above could take it above 7.2990.
On the downside, support is seen at 7.1748 (23.6% Fib) and break below could take it near 7.1214 (38.2% Fib).
