Forex

Turkey stops lending to FX-richer firms to boost lira. Stocksak


© Stocksak. FILEPHOTO: A woman holds Turkish Lira banknotes. This illustration was taken May 30, 2022. REUTERS/Dado Ruvic/Illustration

ISTANBUL, (Stocksak), – Turkey tightened lending guidelines for many companies with over $500,000 in foreign currency cash. On Friday, more borrowers were swept up under rules adopted in June to reverse a tumble lira.

According to the BDDK bank regulator they will not be permitted to obtain new lira loans if they have more than 10 million lire ($538,000) in forex cash assets.

The parameters were updated from the four-month-old ones, which covered companies with 15,000,000 lire of forex assets and more than 10% of total revenues or assets.

The record-breaking lira currency reached new lows in recent weeks due to the authorities’ unconventional policy of reducing interest rates to combat rising inflation.

($1 = 18.5814 liras)

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