ISTANBUL: The Turkish lira rose off 5-1/2 month lows on Wednesday on speculation the U.S. Federal Reserve would maintain a pledge on low rates later in the day, giving riskier emerging market assets a breather.
Shares in Bank Asya fell 10 percent to 0.72 lira, extending this week's losses to 42 percent amid uncertainty over its future.
The lira firmed to 2.2083 against the dollar by 0836 GMT from 2.2140 late on Tuesday.
Emerging markets have suffered in the last week as investors assessed the likely timing and speed of rate hikes by the Fed. This has boosted the dollar and U.S. Treasury yields.
But stocks rose and the dollar dipped after Wall Street Journal's Fed watcher said the central bank would keep the words "considerable time" in its policy statement, though it might qualify them. The Fed's two-day policy meeting ends later on Wednesday.
"Risk sentiment found support from reports that China is providing liquidity to major banks and hopes that Fed will not speed up plans to raise rates," said TEB-BNP Paribas strategist Erkin Isik in a note.
"If the FOMC does not change its forward guidance and long-term policy rate forecasts significantly, this could ease concerns over global liquidity conditions and reverse the recent sell-off."
Reports out of China suggested the country's central bank would provide 500 billion yuan in short-term funding to the country's top five banks.
Turkey is susceptible to changes in global liquidity conditions due to its large current account deficit.
The main share index rose 0.67 percent to 79,161.11 compared with a 0.74 percent gain in the emerging markets index .
The benchmark 10-year government bond yield was unchanged at 9.21 percent.
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