Woman holds Turkish Lira banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration
For much of this year, authorities have taken a hands-on role in foreign exchange markets, using up tens of billions of dollars of reserves to hold the lira steady. The bank's net forex reserves touched a record low of negative $4.4 billion last month, after forex demand surged during the election process.
Markets are also waiting for the appointment of a new central bank governor to replace Sahap Kavcioglu, who spearheaded rate cuts under Erdogan's unorthodox policies. Under pressure from Erdogan, a self-described "enemy" of interest rates, the central bank slashed its policy rate to 8.5% from 19% in 2021 to boost growth and investment. But it sparked a historic lira crisis in December of 2021 and sent inflation to a 24-year high above 85% last year.