Turkey may lift transaction ban on foreign banks, but investigation will continue: Anadolu

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On Thursday, Anadolu reported Turkish regulators had launched legal actions against London-based financial institutions over allegations they bought large sums of foreign currency and then defaulted on Turkish lira liabilities to weaken the currency.

Shortly after, the BDDK banking watchdog said it had imposed a lira transaction ban on the three banks as they had not fulfilled their Turkish lira liabilities in due time. It said then the ban would be maintained until further notice and would include transactions with the banned banks’ group banks that operate in other countries.

UBS declined to comment on Thursday on the BDDK action. BNP and Citibank have not responded to Reuters’ request for comment.

On Sunday, Anadolu quoted BDDK Chairman Mehmet Ali Akben as saying the ban may be lifted if the banks fulfilled their lira liabilities, but that an investigation would still continue.

“We will keep battling manipulation attempts in a determined way,” Akben was cited as saying. “If the three banks fulfil their liabilities, the transaction ban could be lifted, but the investigation will continue,” he said.

The BDDK’s move on Thursday followed a sharp selloff in the lira , which weakened to a record low of 7.2690 to the U.S. dollar. The currency later steadied after rebounding from its losses and stood at 7.0795 against the U.S. dollar at Friday’s close.