Central bank lowers FX market reserve requirement limit to prevent value loss of lira

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Turkey's Central Bank headquarters is seen in Ankara.

Turkey’s central bank lowered the foreign exchange market reserve requirement limit on Monday in order to prevent subsequent value losses in the Turkish lira, the state-run Anadolu news agency reported.

“The upper limit for the FX maintenance facility within the reserve options mechanism has been lowered to 40 percent from 45 percent,” the central bank said in a statement published on its website.

The bank added: “With this revision, approximately $2.2 billion of liquidity will be provided to banks.”

The US dollar was traded for TL 3.82 on average at the beginning of the current year.

Last week White House Press Secretary Sarah Huckabee Sanders said the US had imposed sanctions on Süleyman Soylu, Turkey’s interior minister, and Abdülhamit Gül, its justice minister, for not releasing American pastor Andrew Brunson, who faces “terrorism charges” in Turkey.

According to US law, individuals on the sanctions list will have their assets and properties under US jurisdiction blocked and American businesses and individuals will be prohibited from engaging in financial transactions with them.

The lira started to plunge following imposition of the US sanctions, reaching 5.20 to the US dollar by market close on Monday.

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