Swap Agreement Turkey

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Turkey`s central bank said the change in the limit of the 2018 swap agreement with the Central Bank of Qatar was aimed at «facilitating bilateral trade» in local currencies and «supporting the financial stability of both countries.» The lira, which started the day on Wednesday between 6.78 and 6.79, rose to 6.76 against the dollar with news of the new swap agreement, marking its strongest level since mid-April. With the opening of the markets, the exchange rate returned to 6.79 levels. Turkey`s central bank said in a statement that the two countries extended a swap deal first reached during Turkey`s 2018 currency crisis and reaffirmed the close ties between President Recep Tayyip Erdogan and the wealthy Gulf nation. Last year, following an official visit by President Recep Tayyip Erdoğan, the Turkish and Qatari central banks agreed to increase the volume of a currency swap agreement to $5 billion. Many observers believe that the Turkish Central Bank is using local currency swap channels to inflate its foreign exchange reserves. Ferhat Yükseltürk, co-founder of Econs, said: «At tomorrow`s meeting, the 50-point interest rate cut, which is expected by the market, could change, especially with the increase in swap news.» The move came after finance ministry officials said on Tuesday that trade negotiations between Turkey and many countries were continuing, including trade in local currencies. A statement from the CBRT said the purpose of the deal with Qatar was to facilitate trade in local currencies and support financial stability in both countries. «We are doing individual trade negotiations with the G20 countries with which we have a trade deficit and a free trade agreement,» Albayrak said on May 6 during an online meeting with international investors behind closed doors. The central banks of Turkey and Qatar have raised the ceiling on currency swaps from US$5 billion to US$15 billion, the Central Bank of the Republic of Turkey (CBRT) announced on Wednesday, while Finance Minister Berat Albayrak said Turkey would more efficiently conduct swaps in local currencies in the coming period. noting that the country would achieve significant gains in all areas in the second half of the year. He added that Turkey does not plan to negotiate swap lines with the International Monetary Fund (IMF). . .

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