Turkish central bank triples Qatar currency support deal to $15 billion

Turkey’s central bank tripled its currency swap agreement with Qatar on Wednesday, securing much-needed funding as the country of 82 million burns through its reserves and faces a widening fiscal deficit and potential full-year recession.

The move amended the original limit of $5 billion on the two countries’ initial swap agreement in 2018, raising it to $15 billion.

“The core objectives of the agreement are to facilitate bilateral trade in respective local currencies and to support financial stability of the two countries,” the bank said. The swaps are performed in Turkish lira and Qatari riyal.

A currency swap line is an agreement between two central banks to exchange currencies, set up to improve liquidity conditions and provide foreign currency funding to domestic banks during periods of market stress. Funding markets have deteriorated in Turkey, with the lira hitting its lowest point ever just this month amid investor concerns over the country’s finances.