Turkish central bank defends reserves-boosting swaps activity

Turkish lira
Turkish lira banknotes

The Central Bank of the Republic of Turkey (CBRT) has sought to dispel accusations that it is using short-term swaps to artificially inflate its foreign exchange reserve figures.

In a section of its monetary policy report, published today (April 30), the central bank says the depreciation of the lira in late March put pressure on banks that borrow in foreign currencies and lend in lira.

An offshore lira liquidity squeeze contributed to much increased demand for lira through central bank swaps,

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