Update 2 : Turkey's Lira was in freefall as it was, after CBRT's dollar liquidity boost was shrugged off, but shortly after the US equity market close - perhaps suggesting a margin call - the Lira flash-crashed an additional 10 handles in a few minutes...

And in context for the day...

How long before Erdogan resorts to capital controls?

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Update 1 : It is becoming increasingly clear that, despite his claims of omnipotence, Turkey President Erdogan has officially lost control of his nation's currency.

For a few very brief moments, the Lira bounced after the stopgap central bank measure... but has now returned to freefall mode.

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In an ominous sign for Turkey, moments ago the central bank announced it was pulling a page from the Chinese central bank playbook, and lowered its reserve requirement ratio lower to 40% from 45%, in a move that was meant to boost dollar-strapped bank liquidity by some $2.2 billion USD.

The central bank statement is below:

The upper limit for the FX maintenance facility within the reserve options mechanism has been lowered to 40 percent from 45 percent and tranches have been determined as follows; With this revision, approximately 2.2 billion US dollars of liquidity will be provided to banks.

It's ominous, because while the Turkish Lira initially moved higher in kneejerk response, it has since recovered all gains and is back to unchanged.

Whether this indicates a loss of central bank credibility, or simply the market's warning that $2.2BN is nowhere near enough to satisfy the financial system's liquidity shortfall, Turkey is approaching a dangerous area where no matter what the central bank does - absent a dramatic rate hike of course which Erdogan will likely never greenlight - the currency's freefall may continue, culminating with both a currency and economic crisis.