US economy

Turkish lira steady against dollar; eyes on central bank

© Reuters. A money changer counts Turkish lira bills at an currency exchange office in central Istanbul, Turkey

ISTANBUL (Reuters) – The Turkish lira was steady against the dollar on Friday, having tumbled a day earlier on reports that the central bank deputy governor and rate-setter Erkan Kilimci was leaving the bank.

Three sources familiar with the matter told Reuters that Kilimci was leaving the central bank, two weeks before its monetary policy committee meets to address the slump in the lira, which has weakened 43 percent this year.

The lira traded at 6.6500, at 0505 GMT, unchanged from Thursday’s close, but well off an overnight low of 6.8994. Turkish markets were closed for a public holiday on Thursday, but the lira continued to trade offshore.

Kilimci is joining the board of the Development Bank of Turkey, according to a bank document. The central bank was not immediately available for comment on Thursday.

“Kilimci had no disagreements with the central bank administration on any issues – including interest rates. His expertise will be employed at another public position, that’s all,” a senior source told Reuters.

The central bank has been under pressure from President Tayyip Erdogan not to increase interest rates, despite high inflation and the lira slide, which has fuelled concerns about the economic outlook.

The central bank and the banking watchdog have taken a series of measures to underpin the currency since its recent slide began. The Official Gazette said on Friday that Turkey had lowered the level of withholding tax on lira bank deposits, while raising the tax level on foreign currency deposits of up to one year.

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