at nearly $73 billion below zero when swaps with lenders and other central banks are taken into account, a level the US bank said is now “below those that preceded previous periods of currency volatility.”

The central bank’s net foreign assets are estimated by Goldman Sachs Group Inc. Stealth interventions by the central bank reached $30 billion in April alone, according to Bloomberg Economics, bringing the total spent since December 2021 to nearly $177 billion. The lira has been under pressure since Turkey ramped up a slew of unorthodox economic policies starting in 2018, ranging from state intervention to interest-rate cuts in the face of surging inflation. “But it will be extremely challenging to achieve both objectives at the same time.” “Erdogan’s government will try to keep interest rates as low as possible and it will also try to avert the necessary currency adjustment as a much weaker lira would be inflationary,” said Viktor Szabo, an investment director at Abrdn in London. While ballots were still being counted, state banks also began intervening to support the exchange rate. A day earlier, they unveiled new rules that penalize commercial banks if their customers purchase gold or withdraw cash using credit cards. On Wednesday, policymakers told lenders to channel more hard currency into liras in retail accounts. It’s a significant shift in the timeline from the end of last week, when they expected that level to be reached before the end of September. Options traders now see a two-thirds chance of the Turkish currency weakening to 26 per dollar in the last three months of the year, which would amount to a depreciation of 24%.

Lira bet