Turkey’s forex holdings drop more than $2 bln after rate cut

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Turkish locals’ forex and precious metals holdings dropped by more than $2 billion to $235.16 billion in the week to September 24, data showed on Thursday, as Turks bought lira seeking to profit off the currency that hit a record low against the dollar.

The lira, which has been an emerging markets laggard for several years and is prone to abrupt depreciations, declined sharply after the central bank unexpectedly cut its policy rate to 18 percent last week.

It hit a record low of 8.9490 against dollar on Wednesday.

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Turks’ forex and gold holdings have steadily risen in recent years to hit a record of more than $238 billion this month. They stood at $237.3 billion as of Sept. 17.

Locals have flocked to hard currencies to hedge their savings against double-digit inflation and the ailing lira, which lost 20 percent of its value against the dollar last year, and some 17 percent so far this year.

Locals saw the lira’s decline after the rate decision as an opportunity and sell the foreign currencies they had bought at lower levels.

Separately, the central bank’s gross forex reserves rose to $82.84 billion in the same period from $81.42 billion a week earlier.

Read more:

Turkey’s lira nears all-time low after central bank cuts interest rates

Turkey’s central bank cuts key rate after President Erdogan pleas

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