The Turkish lira hit a 42-day high against the U.S. dollar on Friday, following an announcement by the Turkish central bank on its rediscount credits program.
On Friday, the central bank said Turkish exporters and FX exchange services can repay loans that were obtained through the rediscount credits program, which are made via intermediary financial institution like Turk Eximbank, back in Turkish lira.
According to the release, all credits lent prior to January 1, 2017, and due by May 31, 2017, are eligible for repayment in Turkish lira, “The Central Bank buying exchange rates announced on 2 January 2017 will be applicable for these transactions.,” said the Turkish central bank.
Rediscount credits extended to businesses/companies are usually made in lira and paid back in foreign currency, however, today’s announcement by the Turkish central bank has been interpreted by currency market participants as a positive development for Turkey’s national currency.
On Friday, at 10:45 a.m. EST, the USD/TRY currency pair traded as low as 3.62895 - an exchange rate not seen since January 6, 2017. At press time, the Turkish lira is up 0.72 percent on the day:
Lira banknote photo by ccarlstead
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