ISTANBUL: The lira strengthened further below 6.0 against the dollar in early trade on Monday, extending gains late last week, with two sources saying state banks sold around $4.5 billion last week to support the Turkish currency.
The lira stood at 5.9690 against the U.S. currency at 0539 GMT, firming from a close of 5.9955 on Friday, having hit its weakest level in more than seven months at 6.2460 last Thursday.
The lira has lost as much as 15 percent against the dollar this year, with the latest weakness driven by investor concerns over last week's decision to re-run Istanbul's mayoral election, which the main opposition party narrowly won.
Two sources said the banks' dollar sales last week included a flurry of selling late on Friday. The central bank on Thursday tightened policy by funding the market at a higher rate and taking liquidity steps to bolster the lira.
Finance Minister Berat Albayrak said on Sunday in an interview with broadcaster CNN Turk that the economy will hopefully overcome the impact of a currency crisis last year with just two quarters of contraction.
The economy contracted 3.0 percent in the fourth quarter of 2018 from a year earlier, after a currency crisis knocked some 30 percent off the value of the lira last year. Economists expect two more quarters of contraction year-on-year.
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