Exchange Rate Move by the Central Bank
In order to prevent volatility in exchange rates, the Central Bank has initiated Turkish Lira-settled forward foreign exchange sales.
Following market fluctuations, the Central Bank has taken action. To ensure the healthy functioning of the foreign exchange market, prevent fluctuations in exchange rates, and balance foreign exchange liquidity, the CBRT has started Turkish Lira-settled forward foreign exchange sales.
WHAT DOES CBRT’S DECISION MEAN?
Within these transactions, the Central Bank determines a foreign exchange rate for a specific maturity. Parties execute the transaction at the pre-agreed rate on the specified maturity date.
Instead of foreign exchange transfer, only the exchange rate difference is paid in Turkish Lira. The CBRT utilizes this mechanism to manage exchange rate risk and reduce market fluctuations.
