Turkey Takes a First Step Toward Capital Controls

Turkey’s step toward capital controls to support the plunging lira will create additional uncertainty and presages further administrative efforts to preserve foreign exchange. On Jan. 3, the Central Bank of Turkey (CBRT) announced that exporters will now be required to convert 25% of their earnings in U.S. dollars, euros or British pounds to Turkish liras. The new surrender requirement on export revenue is a de facto capital control measure and marks Ankara’s latest effort to curb the increasing dollarization of Turkey’s economy amid the local currency’s free fall. ...