Currency prices on display in Istanbul. Photo: AFP/Emrah Oprukcu
Currency prices on display in Istanbul. Photo: AFP/Emrah Oprukcu

After a more than 8% rise in the Turkish lira versus the US dollar on Tuesday, the unit continued its rally on Wednesday as authorities took measures to curb bets against the currency.

Turkey’s banking regulator cut in half the number of currency-swap transactions allowed to 25%, after restrictions already imposed on Monday, according to Bloomberg. Before the rally, the lira had lost around 45% of its value this year to date, posting record lows on a near-daily basis.

Turkish bonds were also buoyed by the moves, with yields falling 25 basis points.

The respite from the lira’s nosedive comes as a diplomatic fight between Ankara and Washington continues to spiral out of control. On Wednesday, Turkey increased tariffs on US cars, alcohol and cigarettes, after President Recep Tayyip Erodgan’s calls for a boycott of American consumer goods a day earlier.

The moves are a response to the Donald Trump administration’s decision to raise tariffs on metals imported from Turkey and place sanctions placed on Turkish officials. Washington took the measures after Ankara refused to release a US citizen who is being held on terrorism charges.