Turkish Central Bank launches forward selling to stabilize FX market

In a decisive move aimed at curbing volatility in the currency markets, the Turkish Central Bank announced Thursday that it will begin Turkish lira-settled foreign exchange forward selling transactions.

This new move is designed to help maintain a stable foreign exchange market, prevent sudden currency swings, and ensure steady liquidity.

"The Central Bank of the Republic of Türkiye will start conducting Turkish lira-settled foreign exchange forward selling transactions in order to ensure the sound functioning of the foreign exchange market, prevent possible volatilities in exchange rates and stabilize foreign exchange liquidity," said a statement.

The decision comes in response to recent volatility in the Turkish lira, with the aim of boosting confidence in the financial system.

On Wednesday, the lira fell by as much as 12%, hitting a record low of 41 against the greenback before stabilizing at around 38.