To stabilize the foreign exchange markets, the Central Bank has initiated Turkish Lira-settled forward foreign exchange transactions (NDF).

The Central Bank of the Republic of Turkey (CBRT) announced on its social media account that it has started Turkish Lira Settled Forward Foreign Exchange Sale (NDF) transactions. This move came right after the fluctuations in the foreign exchange markets. The CBRT’s action is considered a critical intervention to alleviate pressure on the exchange rate. WHAT DOES CBRT’S DECISION MEAN? In these transactions, the Central Bank determines the exchange rate for a specific period in advance. Parties conduct transactions based on the pre-agreed rate at the predetermined maturity date. Instead of foreign exchange transfers, only the exchange rate difference is paid in Turkish Lira.