Turkish central bank deputy governor to resign as crisis deepens

Turkey: Currency Continues to Struggle

Turkey: Currency Continues to Struggle

The Turkish lira strengthened against the dollar yesterday as a cut in taxes on lira bank deposits helped rein in losses from a day earlier, when sources said the central bank's deputy governor Erkan Kilimci was leaving.

According to a decree law announced in the Official Gazette on Friday, the withholding tax on foreign currency deposits of up to six months is raised from 18 percent to 20 percent, deposits of up to one year is raised to 16 percent from 15 percent.

Meanwhile tax on lira savings deposits of up to six months was brought down from 15 to 5 per cent.

The US Dollar was up over 4 percent on Thursday against the Turkish currency, trading at 6.7422 by 1:00 p.m. London time. Withholding tax on lira deposits of more than one year was, however, lowered from 10 percent to zero.

The Development Bank of Turkey, an institution aimed at promoting development and sustainable growth in the country, has released a document showing that Mr Kilimci is joining its board.

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No one was immediately available at either bank for comment on Thursday, a public holiday in Turkey.

Senior sources in the Central Bank said Mr Kilimci's departure reflected "no disagreement" with the administration.

Thursday's depreciation followed news that the Turkish central banks' deputy governor, Erkan Kilimci, had resigned and would take up a new position at Turkey's development bank.

Turkish President Recep Tayyip Erdogan has long pressured the central bank against monetary tightening, calling himself "the enemy of interest rates" as he prioritized rapid growth over tempering runaway inflation, now at more than 15 percent.

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