The Turkish Lira dipped to a record low against the Euro, trading for a whopping 8,91 liras on the unit on Sept. 15, a new record following 8.89 liras on the unit on Sept. 14.
Turkish Treasury is “printing” forex bonds to create additional foreign currency for its own operations. Public banks, on the other hand, are spending their cash foreign currencies and replacing them with forex bonds the Treasury is printing.
Turkish public banks have started charging clients for foreign currency withdrawals in accordance with the Central Bank's August 4 decree that aims to push down the amount of foreign cash circulating in Turkey. The 0.2 to 0.5 percent commissions for withdrawals are part of Ankara's efforts to lower the Turkish Lira's exchange rate against the dollar and the euro, which peaked to record highs earlier this month.
The recent introduction of the Turkish Lira in towns of northern Syrian constitutes the final step in an assimilation policy enforced by Ankara in the region, journalist and Middle East expert Bereket Kar said. Reports have shown that cash and coins were brought in through the Turkish postal service (PTT).
Turkey's private sector held $177.6 billion in foreign debt as of March this year, according to the most recent figures from Turkey's Central Bank. 61.8% of this debt was denominated in dollars and 33.5% in euros, while only 3% was held in Turkish lira.
Since the COVID-19 crisis erupted, Turkish Central Bank’s reserves fell nearly 20 billion dollars. Now, the thought of “Can there be a swap line opened from the U.S. Central Bank Fedreserve ?” is in question.