Turkey's central bank has announced a series of measures aimed at supporting the lira and making it more attractive to investors.
Bank Governor Hafiza Arkan said the measures included the abolition of minimum interest rate requirements for lira accounts protected against exchange rate fluctuations.
The move allows banks to offer lower interest rates. The Turkish Central Governorate confirmed that the new measures aim to increase domestic and international demand for lira assets.
Last month, the bank began phasing out a program to protect lira deposits from exchange rate fluctuations.
The Turkish lira is witnessing a new decline against the dollar, reaching near its lowest levels during today's trading at 27.20 liras to the dollar.
The all-time low hit by the Turkish currency last month was 27.28 liras to the dollar.
Economists attribute the lira's repeated decline despite interest rate hikes, most recently at 30 percent, to the fact that the interest rate is still below the country's annual inflation rate, which is close to 60 percent.
Procedures
Last Thursday, Turkey's central bank announced a key interest rate hike of 500 basis points to 30% to counter inflation, the highest level in 20 years.
This came during a meeting of the Monetary Policy Committee at the Central Bank chaired by the Governor of the Bank.
It is the third time Turkey's central bank has raised interest rates since June.
The Turkish central bank pointed out that the strong trajectory in domestic demand, and the rise in oil prices, is creating additional upward pressure on inflation.
The bank's statement confirmed that the MPC decided to continue the process of monetary tightening in order to control inflation.
The Turkish central bank also said in the statement that the committee will continue to take decisions to tighten credit along with increasing interest rates.