Lenders discouraged from opening swap positions with counterparties abroad might also bring the money home, analysts said.
The offshore market, moreover, greases the wheels of the billions of dollars in foreign investment Turkey draws each year — direct bricks-and-mortar commitments as well as stock and bond flows.
Graphic - Forex freedom bank balance of payment: here.
The BDDK did not respond to requests for further comment. Analysts said the move may be motivated less by the desire to lift the currency and more by a need to rebuild reserves. Investors are worried that depleted forex reserves could hamstring the response to a pending recession brought on by measures taken to halt the spread of COVID To make up for smothering offshore markets, Turkey has opened a domestic swap forex freedom bank under Borsa Istanbul.
The restrictions could exacerbate recent forex freedom bank in overseas lira trading. But Turkey may find it harder forex freedom bank shield the lira in this manner.
He noted Turkey remains reluctant to hike interest rates to defend the currency, instead making its seventh consecutive cut in March.