Turkey laid down new definitions for currency manipulation, appearing to respond to trading this week that sent the lira to a record low.
Banks’ trading in the foreign exchange market will be considered manipulative if the transactions are deemed to cause “misleading pricing” or keep asset prices abnormally high or low, Turkey’s banking regulator said in a statement on Thursday.
The watchdog said that institutions conducting swaps, options and forward transactions, or other derivatives trading, with foreign entities, or providing liras abroad in a way that undercuts regulator restrictions will be considered to have manipulated the market.
Turkey’s lira slid to a record low of 7.24 per dollar on Thursday. That price exceeded the level seen during a currency crisis in the summer of 2018. The lira’s recent weakness, which the central bank has sought to prevent by selling billions of dollars of its foreign currency reserves, has intensified concerns for economic stability during the coronavirus outbreak.
The spreading of so-called misleading or wrong information on financing assets by mass media would also be considered manipulation, the regulator said.