Qatar offers Turkey relief by tripling FX swap line to $15bn

21 May, 2020 12:00 AM printer

ISTANBUL: Turkey secured a tripling of its currency-swap agreement with Qatar to $15 billion, the central bank said on Wednesday, providing some much-needed foreign funding to reinforce its depleted reserves and help steady the Turkish lira.

Ankara had been urgently seeking access to funds from Doha and elsewhere to head off a potential currency spiral, and analysts say tens of billions of dollars might be needed. A senior Turkish official told Reuters talks are continuing, report agencies.

Turkey’s central bank said the deal with its Qatari counterpart - which raised the existing FX limit from the equivalent of $5 billion - would support financial stability and trade.

The lira touched a historic low earlier this month as investors fretted over a drop in the central bank’s net FX reserves and the country’s relatively high foreign debt obligations, accelerating Ankara’s overseas funding search. Reuters reported last week that officials from Turkey’s Treasury and central bank had appealed to counterparts in Qatar and China.