Markets

Lira decline calls banks on the scene


The Grand Bazaar in Istanbul is home to many exchange offices.
Image: AP

Banks in Turkey have begun charging fees for foreign currency cash withdrawals due to the currency slide.

D.he currency depreciation in Turkey is spreading. Domestic banks have since begun to charge fees for cash withdrawals of foreign currency because of the lira exchange rate slide, bankers reported on Thursday. Some financial institutions required this for withdrawals above a certain amount, others were still working on their strategy.

“It started gradually within the sector,” said one banker. All institutes would likely follow suit. Since the currency crisis in 2018, the Turks had increasingly hoarded hard currencies. In the wake of the massive decline in the lira in recent weeks, the volume increased to $ 213 billion by the end of July. This has sparked fears among financial institutions that they could run into bottlenecks if the volume of foreign currency cash withdrawals soared. The Turkish central bank recently classified such withdrawals as transactions for which banks can charge fees.

The national currency has lost around 20 percent of its value against the dollar since the beginning of the year. The course also gave way on Thursday. The American currency was thus only just below its recently marked record high of 7.3652 lira.

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