Gold Price Drop Hits Turkey’s Central Bank Reserves

Turkey’s Central Bank (TCMB) experienced a sharp decline in its reserves last week, as falling global gold prices and political uncertainty triggered heavy foreign exchange sales.

According to three bankers who spoke to Reuters, the Central Bank’s total reserves — including gold holdings — dropped by around $13 billion to $185.5 billion during the week ending October 24.

Preliminary data indicated that net reserves fell by about $12 billion, reaching $67.5 billion. Bankers estimated that more than $5 billion of this decrease stemmed from last week’s global drop in gold prices, which fell 3.3% on the spot market.

When excluding swaps, net reserves declined by just over $11 billion, falling to approximately $52 billion.

5 Billion Dollars in Forex Sales Amid Political Tension

Bankers also estimated that the Central Bank sold between $5 and $5.5 billion in foreign currency last week amid rising domestic political tensions. The markets closely followed a court case demanding the annulment of the CHP congress, which was ultimately rejected on Friday. Following the court’s decision, the Turkish lira and lira-based investment assets performed positively.

As of publication time, the Central Bank had not issued an official comment. The official data is expected to be released later this week.

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