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Central Bank Asks Lenders to Charge 40% Interest Rate on Dollar Forward Contracts

TURKEY
  • Lenders have been asked to charge a minimum 40% interest rate on dollar forward contracts as part of the central bank’s latest liraization measures, according to people with direct knowledge of the matter cited by Bloomberg.
  • Previously the price of the contracts was capped at 30%. Authorities believe the measure will curb demand for dollars by making it more expensive for clients to buy protection against currency swings via forward contracts with commercial lenders.
  • The central bank have also urged lenders not to sell dollars at a rate below 19.05 liras per dollar.

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