The ban to trade in Turkish lira proved a short-lived experience for UBS and two other big banks. The damage to the country's economy would have become too big if the regulator had persisted.
The Turkish banking regulator BDDK has removed the ban on transactions in the Turkish lira on UBS, Citigroup and BNP Paribas, according to «Reuters». BDDK had introduced the ban only last week on grounds that the banks had defaulted on their lira liabilities.
The ban coincided with a plunge of the Turkish currency, which had reached a new low last week. BDDK now recognized that the three banks had complied with their duties in retrospect. It will however follow through with its investigation of the case.
Currency Plunge on Debt Load
Turkey has opted to pursue of number of financial market players based in London on suspicion of currency manipulation. The lira has declined following the spread of the coronavirus pandemic as the country grapples with its huge debt and dwindling currency reserves.
The volume of trading in lira had dropped substantially at the beginning of the business week with other foreign banks suspecting further action against the industry was pending.
