Turkey raised to 0.1% from zero a bank and insurance tax on some foreign exchange sales, the country’s Official Gazette said on Wednesday, marking another policy change meant to discourage a months-long trend of Turks selling the beleaguered lira.
The presidential decision, which would boost government revenues, kept at zero the so-called BSMV forex sales tax on transactions between banks, those to the Treasury, and for those repaying to banks foreign currency loans.
“This step appears to be aimed at both raising revenues and to deter people from foreign currencies,” said Garanti Securities Coordinator Tufan Comert.
The banking and insurance transactions tax on all forex transactions, known in Turkey as BSMV, was set at 0.1% under a cabinet decision published in 1998. But it was reduced to zero in 2008.
The Turkish lira weakened to 6.07 against the dollar by 0615 GMT from a close of 6.0355 on Tuesday. It was not clear if there was any immediate impact from the tax change.
The currency weakened after a U.S. House of Representatives committee on Tuesday released an early version of a spending bill that seeks to prevent the shipment of F-35 fighter jets to Turkey, as U.S. officials press Turkey not to buy a Russian S-400 air defense system.
The currency had firmed on Tuesday as investors weighed up reports that Ankara was evaluating Washington’s proposal to delay delivery of Russian defense systems and state banks continued to sell dollars to support the currency. ($1 = 6.0430 liras)
(Reporting by Can Sezer and Nevzat Devranoglu; Writing by Daren Butler; Editing by Jonathan Spicer)
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