Turkish Bank Hikes Reserve Requirements Again

The Turkish lira depreciated against the U.S. dollar to the lowest level it had seen in three months. Turkish stocks dipped on the news. The Turkish Central Bank raised reserve requirements, which may have prompted the sell-off as investors might have decided to withdraw from local assets.

reported that the central bank is attempting to slow the growth in loans, which are increasing the current-account deficit. Turkey has raised reserve requirements four times since December. The bank is set to officially announce the rate hike at 2pm. Tunc Yilidirim, a director at Standard Unlu Securities, told Bloomberg that a increase of more than 100 basis points may trigger further sales. Traders expecting Turkey to rebound might consider iShares MSCI Turkey Index Fund

.