Turkish Lira Hit Lowest Level in Month

Turkey’s lira fell to its lowest level in almost a month following the central bank's decision to ease lending requirements for banks.

On Tuesday, the lira dropped 1.2 percent against the U.S dollar to trade at 5.72 TRY. Declines came amid a broader sell-off of the Turkish currency in emerging markets.

last month, the central bank cut interest rates after President Recep Tayyip Erdogan dismissed its governor, setting less capital to cover a potential run on deposits at a minimum of 10 percent lending rate.

Stormed by a currency crisis and a growing debt last year, Investors are concerned that the central bank is exposing the economy to increased financial risk by setting lower lending rates and fiscal easing.

The central bank said earlier, that Banks can hold two percent of the value of 3 months maturity deposits to maintain loan growth between 10-20 percent.

The bank added that the reserve ratio for the 6 months maturity deposits also fell to 2 percent from 4 percent in earlier estimates.

The lira has dropped by more than 7 percent against the dollar this year after losing almost a third of its value in 2018, prompting an economic recession.

Lowered lending coasts offered by state banks has helped the Turkish economy grew quarterly in the first 3 months of this year, however, consumer confidence remains undermined.

Meanwhile, the currency's losses this week were due to the broader closure of foreign accounts in Turkish currency.