Turkish lira improves after credit restrictions

The Turkish lira rose 6 percent against the dollar on Monday, the latest move to curb the lira lending to a number of companies with more than $ 1 million in foreign currency.
At 0531 GMT, the lira rose to 16,099 against the dollar, after it closed at 16.99 lira against the dollar on Friday.
Following the closure of most domestic markets on Friday, the Banking Regulatory and Oversight Commission of Turkey announced that companies holding foreign currency assets of more than 15 million lira ($ 908,000) and total assets or more than 10 percent of annual revenue would not be allowed. New loans in pounds.
Analysts expected the move to support the lira because it would force many large and medium-sized companies to convert their foreign currency assets into lira.
The new move is the latest in a series of measures taken by the government and the central bank following the historic collapse of the currency last December, which raised inflation. The Banking Regulatory and Supervision Commission confirmed that the move would improve financial stability.
Although high inflation hit 73.5 percent in May, the lira lost 44 percent of its value against the dollar last year after a series of interest rate cuts. This year, despite gains on Monday, the lira is still 18 percent weak.
The lira is still under pressure due to policy concerns, declining official reserves, a high current account deficit and fears of capital restrictions by some investors and depositors.