(Updates with lira in third paragraph, reserves in fourth.)
June 29 (Bloomberg) -- Turkey’s central bank cut the amount of dollars it buys in daily auctions after European debt worries reduced the flow of foreign currency to the country.
The central bank in Ankara will buy $30 million daily instead of $40 million, effective today, according to an e- mailed statement. The purchases may be further adjusted in size or suspended, depending on developments, it said.
The lira strengthened after the announcement and was trading 0.5 percent higher at 1.6346 per dollar at 10:59 a.m. in Istanbul.
The reduction in purchases follows a cut from $50 million to $40 million at the end of May. The cut will lower the amount of lira liquidity the bank provides and “reduce the need for additional increases to reserve-requirement ratios in the second half of 2011,” the bank said in the statement.
The central bank has increased reserve requirements for banks four times since December in an attempt to slow the annual growth of consumer lending to 25 percent by year-end from about 35 percent.
The central bank’s international reserves were $92.3 billion as of June 17, 31 percent higher than a year earlier, according to the latest data from the bank.
--Editors: Heather Langan, Ben Holland
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