April 18, 2019 / 7:40 AM / 3 months ago

Lira weakens on renewed worries over Turkey's reserves

ISTANBUL/ANKARA, April 18 (Reuters) - The Turkish lira weakened 1 percent on Thursday as concerns about the central bank's foreign-currency reserves resurfaced, undermining gains a day earlier after Turkey's main opposition candidate took office as Istanbul mayor.

The lira slipped as far as 5.8226 against the dollar and stood at 5.8159 at 0726 GMT. The currency tumbled nearly 30 percent in 2018 and has slipped another 9 percent this year.

The Financial Times reported on Wednesday that Turkey's central bank had bolstered its foreign currency reserves with billions of dollars of short-term borrowed money, raising fears among analysts and investors that the country is overstating its ability to defend itself in the event of a fresh lira crisis.

"We can see with the Financial Times story that concerns regarding central bank reserves have increased," said a treasury desk trader at one bank.

"We cannot say that reserves are in a very good situation but contrasting stories and comments recently show the subject has not been well analysed, explained and calculated," the trader said.

On Wednesday, the lira firmed to 5.72 after Ekrem Imamoglu of the secularist Republican People's Party became mayor of Turkey's commercial hub, ending 25 years of control by President Tayyip Erdogan's AK Party (AKP) and its Islamist predecessors.

The loss of control in Istanbul was a heavy blow to Erdogan, but the AKP has appealed to election authorities to have the elections annulled and re-run. (Reporting by Daren Butler and Nevzat Devranoglu; Editing by Jonathan Spicer)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below