CBRT battles external imbalance with dwindling reserves
Turkish central bank loses battle to keep lira under 7 as reserves shrink, but pressures may be easing
The Central Bank of the Republic of Turkey lost a symbolic battle on May 1, when the lira exchange rate ticked above 7 to the US dollar.
Today (May 5), the currency hit 7.09 to the US dollar in trading, in a sign the CBRT may be fighting a losing battle, having kept the exchange rate just below 7 for more than a week. Its capacity to defend the currency is hampered by its dwindling pool of reserves, set against investors’ fears over large external debts and a widening current account deficit.
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