President Joe Biden participates in a pull aside with Turkish President Recep Erdoğan, Tuesday, November 15, 2022, at the Apurva Kempinshi in Bali, Indonesia. (Official White House Photo by Adam Schultz)

Turkey’s central bank has given up trying to support the lira as it has fallen to its lowest levels ever against the dollar. Reuters reports:

Turkey’s lira was mostly flat on Tuesday, after touching a new record low overnight, while bankers said the central bank’s net reserves had marked their largest rise on record last week as it stopped using the reserves to support the lira.

The lira touched a record low of 26.10 against the dollar early on Tuesday during low liquidity hours and later firmed to as much as 25.55. But it later gave up those gains to stand at 26.03 at 0857 GMT, compared with a close of 26.05 on Monday.

The currency has weakened some 28% this year, largely after the re-election in late May of President Tayyip Erdogan, who has since moved to backtrack on his years of unorthodox economic policy.

As part of the policy pivot, the central bank stopped using its reserves to counter forex demand and support the lira. Its net reserves had touched an all-time low of negative $5.70 billion last month after a years-long decline.

Four bankers calculated that the central bank’s net forex reserves had risen by about $8.5 billion last week to around $9 billion, which would mark the largest weekly rise on record.

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