Turkish Reserves Lost ‘Shocking’ $4.8 Billion in Just One Week

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Turkey’s gross foreign-currency reserves fell the most this year, providing further evidence that an effort to support the lira is coming at an increasingly steep cost, Bloomberg News reported. The stockpile shrank by $4.8 billion in the seven days ended May 13, according to central bank figures published on Friday. That brought total holdings, which exclude gold reserves, to a 10-month low of $61.2 billion. The weekly decline was “shocking” and a sign that Turkey is “unsuccessfully leaning against the wind,” Cristian Maggio, the head of portfolio strategy at TD Securities in London, said in a note to clients. Even with Turkish state banks occasionally intervening in foreign-exchange markets, the lira is this year’s worst performer in emerging markets against the dollar with a loss of over 16%. It’s falling against the backdrop of strong demand for the greenback by Turkish corporates, which are trying to insulate themselves from inflation fueled by past episodes of currency depreciation and a rally in global commodities prices. Read more.