Turkish lira rises 6% after lending curbs

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As of 5:31 a.m. GMT, the lira was worth 16.099, up from Friday's closing rate of 16.99. It had risen as high as 16.03 against the dollar.

After most local markets closed for the week on Friday, the BDDK banking watchdog said that companies can't get new lira loans if they have more than 15 million lira ($908,000) in forex cash assets that are more than 10 percent of their total assets or annual revenues.

Analysts thought that this move would help the lira because it could force many large and medium-sized companies to convert their foreign currency assets into lira so they can keep getting credit.

Since a historic currency crash in December sent inflation soaring, the government and central bank have taken a lot of steps, and the new rule was the most recent one.

After Erdogan promised more rate cuts, the Turkish lira fell even more.

The BDDK said that the move would make the economy more stable.

Last year, the lira lost 44% of its value against the dollar. This happened after a series of interest rate cuts, even though inflation was on the rise (73.5%).

Even after the early moves on Monday, it is still 18% weaker this year.

Still putting pressure on the lira are worries about policy, low official reserves, a growing current account deficit, and investors' and savers' fears of capital controls.

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