In order to prevent volatility in exchange rates, the Central Bank has started Turkish Lira-settled forward foreign exchange sales.

After the fluctuations in the markets, the Central Bank took action. The CBRT has initiated TL-settled forward foreign exchange sales operations to ensure the healthy functioning of the foreign exchange market, prevent volatility in exchange rates, and balance foreign exchange liquidity.

WHAT DOES THE CBRT’S DECISION IMPLY?

Under these operations, the Central Bank determines a foreign exchange rate at a specified maturity. The parties then carry out the transaction at the agreed rate at the specified maturity.

Instead of foreign exchange transfer, only the exchange rate difference is paid in Turkish Lira. The CBRT uses this mechanism to manage exchange rate risk and reduce market fluctuations.