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Title: Turkish lira holds ground after week's volatile selloff

11/25/2021 10:56:35 AM GMT

By: AnalysisWatch

The Turkish lira traded unchanged on Thursday after a historic plunge to a record low this week, triggered by President Tayyip Erdogan defending interest rate cuts despite widespread criticism of his policies.

Later in the day, central bankers, regulators, and lenders were to meet to discuss the market turmoil. Separately, officials told Reuters news agency that Erdogan had ignored appeals, even from his own government, to reverse policy.

The lira was worth 12.09 against the dollar at 1044 GMT, having risen as much as 2 percent to 11.85 in early trade. It had hit a historic low of 13.45 on Tuesday.

Before the rally, the currency had hit record lows against the US currency in 11 consecutive sessions. It has lost as much as 45% of its value this year, with about half of those losses since the start of last week.

Fixed-income markets appeared more cautious as the cost of hedging the country's sovereign debt with credit default swaps was 1 basis point higher than Wednesday's 478 basis points, while dollar-denominated government bonds with longer maturities edged lower.

A banking source told Reuters that officials from Turkey's central bank, banking regulator BDDK and the banking association would meet on Thursday to discuss the latest developments in the economy following the lira plunge.

The central bank was due to release at 1100 GMT the minutes of last week's Monetary Policy Committee meeting at which it cut its key interest rate by 100 basis points, bringing the cut since September to 400 points.

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