Turkey’s central bank sold a record amount of foreign currency on Wednesday after the lira dropped more than 12 percent following the detention of İstanbul’s mayor, according to calculations by three bankers who spoke to Reuters.
Bankers say at least $5 billion in foreign currency was sold by the central bank on Wednesday, but some calculate it may have already reached $10 billion for the day.
The Turkish Central Bank declined to comment.
The bankers said the central bank did not directly intervene in the exchange rate but that the transactions it carried out through existing foreign exchange buying and selling methods via public banks indicated a record level of foreign exchange sales.
The central bank carries out FX transactions through many channels such as purchases from exporters and FX-protected scheme payments. These purchase and sale transactions have contributed more than $140 billion in reserves in the last one-and-a-half years.
The Turkish lira was trading at 39 lira to the dollar after the mayor, a key opponent of President Recep Tayyip Erdoğan, was detained over a corruption probe, a move denounced by his opposition Republican People’s Party (CHP) as a “coup.”
Meanwhile, Finance Minister Mehmet Şimşek issued a statement on X following the record increase in exchange rates, saying necessary measures were being taken to ensure the healthy functioning of the markets.
“We are continuing to determinedly implement our economic program,” he said in an apparent bid to ease concerns.