Economy in Turkey: How much foreign currency did the Central Bank sell in the last month?

Prof. Dr. Hakan Kara, a faculty member at Bilkent University and former Chief Economist of the Central Bank of Turkey, revealed the amount of foreign currency sold by the Central Bank in the last month with a graph he prepared.

In a statement on his social media account, Kara prepared a graph showing that the Central Bank continued its intervention in exchange rates before the election.

Kara said in his message, “It seems that about $20 billion worth of foreign currency has been sold in the last four weeks to keep control of the exchange rate.”

Kara also emphasized the need to keep the interest rates on TL deposits higher to stop exchange rate pressure and reserve loss, stating that it was important for small investors to gain profits. In his message, Kara used the following expressions:

Satisfactory returns should be provided to small investors

“In the current situation, after the Central Bank’s liquidity tightening, overnight market interest rates (effective policy rate) have been at a level of 46.5% for three weeks. Its annual compound equivalent is 58.9%. The annual compound interest rate for deposits (1-3 months term) is at the level of 53.6%. Probably when excluding required reserve ratios and large deposits, the interest rate given on ordinary TL deposits is much lower than this. To curb exchange rate pressure and reserve loss, TL deposit interest rates should be pushed higher and satisfactory returns should be provided not only to large depositors but also to small investors.”