Is Turkey moving to freely-traded currency?

ANKARA - The decline in the Turkish central bank's reserves has stopped as the lira's sharp fall against the dollar on Wednesday gives a "strong signal" that Ankara is moving away from state controls to a freely-traded currency, traders said.

The central bank's reserves could enter an upward trend but the payments for a government scheme that protects lira deposits against forex depreciation pose the greatest threat, they said.

The lira dropped as much as 7% on Wednesday, touching a record low of 23.16 against the dollar. It has shed more than 19% this year, sharpening its decline since President Tayyip Erdogan was elected for a third term last month.

The Turkish central bank's net international reserves touched a record low of negative $4.4 billion last month, after years of interventions to keep the lira stable.