Net Reserves of the Central Bank of the Republic of Turkey turn positive
The net reserves of the Central Bank of the Republic of Turkey (CBRT), excluding swaps, have turned positive, showing an improvement of $66.5 billion in a short period. The positive impacts of the economic management program initiated after last year’s Presidential and 28th Term Parliamentary General Elections as part of the fight against inflation are noteworthy.
Significant improvements are being observed in various areas, from the Central Bank reserves to credit risk premiums, from the demand of international investors for bonds to Turkey’s credit rating. The steps taken in line with the roadmap for ensuring price stability have led to an increased interest in Turkish lira (TL) assets, which is expected to grow further in the coming period.
As part of the fight against inflation, the Central Bank, under the leadership of Dr. Fatih Karahan, has supported the demand for TL assets both domestically and internationally through an effective communication strategy and successive simplification steps, including a 4,150 basis point interest rate increase over the past year.
The steps reflecting the Central Bank’s determination regarding price stability have strengthened expectations of a disinflationary process, while the growing interest in the TL continues to be strongly reflected in the CBRT’s international reserves. Reports published by foreign institutions also highlight the increasing interest in TL assets.
A $66.5 Billion Improvement in Net Reserves in Two Months
According to information compiled by an Anadolu Agency correspondent, the CBRT’s net reserves excluding swaps were at minus $65 billion as of March 29, 2024, but increased to $1.5 billion by the week ending May 31. Thus, the net reserves of the Central Bank turned positive, indicating a “very strong improvement” of $66.5 billion in net reserves excluding swaps over two months.
During the same period, gross reserves increased from $123.1 billion to $143.6 billion. Experts reiterated that the positive trend in the transition to the TL and foreign inflows would continue to support the rise in international reserves.
