Central bank use of reserves to support lira poses questions on transparency: Moody's

The erosion of Turkey's foreign currency reserves is a credit negative and central bank use of reserves to prop up the lira currency poses renewed questions on its transparency and independence, Moody's Rating Agency said on Monday. The renewed slip in Turkey's financial markets and uncertain policy reaction to recession raises the risk of further capital flight, Moody's said, adding that the results of local polls will likely determine the future path of macroeconomic policy.

Turkish President Tayyip Erdogan suffered a severe setback as his ruling AK Party lost control of the capital Ankara for the first time in a local election and he appeared to concede defeat in the country's largest city, Istanbul.