ANKARA: The Turkish lira dived 5 percent against the dollar on Thursday as a senior official said banks had started providing the currency to the London market again, after several days of the authorities withholding liquidity to underpin the currency.
The lira has come under renewed pressure over concerns about Turkey’s balance of payments, its ability to service its foreign debt, and calls from President Tayyip Erdogan for its central bank to cut interest rates.
As liquidity in the lira improved, the London overnight swap rate plunged to 50 percent from a crippling 1,200 percent a day earlier, Refinitiv Eikon data showed. It had stood at 24 percent last week.
“We made it clear that this process would not continue for long. It was a step against a speculative attack and it has ended. We do not expect a new speculative attack,” the official told Reuters.
But the lira weakened as far as 5.6465 per dollar from 5.33 on Wednesday. Last year, it plunged almost 30 percent against the dollar. As of 1105 GMT, it had clawed back some of its losses to 5.5950.
Sources had previously said lira liquidity would be squeezed until after Sunday’s local elections.
Rabobank emerging market forex strategist Piotr Matys said the market was braced for a volatile week for the currency after local elections on Sunday.
He said it was critical that Finance Minister Berat Albayrak “acts decisively and announces a comprehensive package of reforms with full details to preserve what has been left from Turkey’s severely damaged credibility.”
“His remarks since the lira crisis last year imply that he is fully aware of what investors expect from him. It is time to deliver,” he said.
Erdogan said on Thursday that the recent volatility in the lira stemmed from currency attacks by the United States and other Western countries and that Turkey must cut interest rates so that inflation falls, a view that counters that of many economists.
Central bank moves
The central bank has taken a series of steps to underpin the lira this week, and bankers said it took one more on Thursday, raising its total lira swap sale limit to 30 percent from 20 percent for swap transactions that have not matured.
It had raised the limit to 20 percent from 10 percent on Monday in a bid to boost the bank’s forex reserves, which fell sharply in the first two weeks of March.
Those falls have raised uncomfortable questions about Turkey’s balance of payments and its ability to roll over its foreign loans — and how and from whom it would seek emergency reserves if necessary.
Central Bank Governor Murat Cetinkaya said on Thursday the bank continued to strengthen its reserves “decisively,” state-owned Anadolu news agency reported.
Total reserves last week increased by $4.3 billion to $96.7 billion as of March 27, Cetinkaya said. He said net reserves rose $2.4 billion to $28.6 billion in the same period.
The London overnight swap rate had spiked on Wednesday to its highest on record by far, posing a huge hurdle to foreign investors looking to bet against the lira. They had instead sold off holdings of Turkish stocks and bonds, which have come under heavy pressure this week.
As the currency dropped on Thursday the cost of Turkey’s debt rose, with the yield on the benchmark 10-year bond climbing to 18.96 percent from 18.21 percent on Wednesday. It has risen 2.5 percentage points since the end of last week.
The main Istanbul share index, which weakened more than 12 percent in the week to Wednesday’s close, rose 0.73 percent on Thursday.
The head of the Turkish banking association, in a statement to Reuters on Wednesday, said lira swap rates had not surged due to banks withholding liquidity from foreign banks.
Turkish lira plunges, banks start providing liquidity again
Turkish lira plunges, banks start providing liquidity again
- The Turkish Lira lost 30 percent of its value against the US dollar last year
- Bank strategist said the market was ready to face increased volatility after elections
Major airlines suspend, reroute flights amid US-Israel strikes on Iran
- Saudia says decision taken in line with aviation safety and security standards
- Emirates said it temporarily suspended it's operations out of Dubai
RIYADH: Major international airlines across the Middle East and South Asia have suspended, canceled or rerouted flights following ongoing US-Israel attacks on Iran and the resulting airspace closures, according to official statements issued via X.
Saudia said in an official statement that it had canceled a number of flights due to developments in the region and the closure of airspace.
The airline said the decision was taken in line with aviation safety and security standards, noting that its Emergency Coordination Center is closely monitoring developments with relevant authorities.
Saudia urged passengers to verify the status of their flights before heading to the airport and said guests would be notified of updates through the contact details associated with their bookings.
The carrier added that further information would be announced in a subsequent statement if available.
بيان رسمي من #الخطوط_السعودية pic.twitter.com/CHfjKj9yLX
— Saudia Group | مجموعة السعودية (@SaudiaGroup) February 28, 2026
Air Arabia said its flights were experiencing cancellations, delays or rerouting as a result of the evolving situation and airspace closures.
The airline advised passengers to check the status of their flights before traveling to the airport by visiting its website or contacting its call center.
Customers booked on affected flights will be notified directly, the airline said, adding that further updates would be provided as the situation develops.
Air India announced a broader suspension, stating that “in view of the developing situation in parts of the Middle East, all Air India flights to all destinations in the Middle East have been suspended.”
The airline said it remains committed to maintaining the highest standards of safety for passengers and crew and will continue to assess the safety and security environment for flight operations, adjusting services proactively as required.
Air India said its teams would extend necessary support to passengers and advised customers to check flight status online or contact its 24/7 call center for assistance.
#TravelAdvisory
— Air India (@airindia) February 28, 2026
In view of the developing situation in parts of the Middle East, all Air India flights to all destinations in the Middle East have been suspended. We remain committed to maintaining the highest standards of safety for our passengers and crew. We will continue to…
All flight operations at Dubai International and Dubai World Central – Al Maktoum International are suspended until further notice, according to a post by Dubai Media Office on X.
Dubai-based Emirates reported that regional airspace closures had caused disruption to several of its flights and that the airline had temporarily suspended its operations from its hub Dubai.
The airline said it is actively monitoring the situation, engaging with relevant authorities and adjusting operations in line with the latest developments.
The carrier apologized to affected customers and said it is assisting them with rebooking, refunds or alternative travel arrangements, reiterating that the safety and security of passengers and crew remain its highest priority.
Due to multiple regional airspace closures, Emirates has temporarily suspended operations to and from Dubai.
— Emirates Support (@EmiratesSupport) February 28, 2026
Emirates urges customers to check https://t.co/Ucm3UswfVh and https://t.co/yehFUeWZQq for the latest updates before proceeding to the airport.
We are actively monitoring… pic.twitter.com/SLDC7iNaUN
Qatar Airways confirmed a temporary suspension of flights to and from Doha due to the closure of Qatari airspace.
The airline said it is working closely with government stakeholders and relevant authorities to support impacted passengers and will resume operations once the airspace reopens.
It warned that delays are anticipated when usual operations resume and said additional ground staff have been deployed at Hamad International Airport and other key airports to assist passengers.
Temporary Suspension of Qatar Airways Flights due to Qatari Airspace Closure
— Qatar Airways (@qatarairways) February 28, 2026
Qatar Airways Group confirms the temporary suspension of its flights to, and from, Doha due to the closure of Qatari airspace.
The airline is working closely with government stakeholders and the…
Meanwhile, Al Jazeera reported that British Airways had canceled flights to Tel Aviv and Bahrain, adding to the list of carriers adjusting operations.
Across their statements, airlines consistently cited airspace closures and safety considerations as the primary reasons for suspensions and disruptions, while urging passengers to monitor official channels for updates as the situation continues to evolve.
