Reuters shares amount of foreign exchange CBRT has sold to keep dolar TL rate at balance

Reuters reported that the net foreign exchange position of the Central Bank of Turkey (CBRT) decreased by $11.2 billion on Wednesday. This drop occurred during the market fluctuations in response to the news of Istanbul Metropolitan Municipality (IMM) Mayor Ekrem İmamoğlu’s detention, which contributed to the depreciation of the Turkish lira.

According to Reuters, based on the CBRT’s analytical balance sheet data and bankers’ calculations, the decrease in the net foreign exchange position was $11.176 billion on Wednesday.

Bankers said that the majority of this decrease, approximately $10 billion, was related to foreign exchange sales conducted on Wednesday morning. A portion of the decline was also attributed to routine transactions. Additionally, foreign exchange operations conducted on the afternoon of the same day and in the following days will be reflected in subsequent balance sheets.

Bankers estimated that about $10 billion worth of foreign exchange had been sold on Wednesday. Predictions for the sales ranged between $8 billion and $11 billion.

After months of stable and calm movement, the USD/TRY exchange rate hit a new record high of 42 on Wednesday. Following the CBRT’s foreign exchange sales of around $10 billion, the rate ended the day near 38.

This week, in addition to the foreign exchange sales, the CBRT also made a tightening decision through an intermediate meeting. Other steps taken by the CBRT this week included the decision to start foreign exchange sales with TL-settled forward contracts and the introduction of a 56-day deposit auction to sterilization tools for the first time.

As of the beginning of the day, the exchange rate is flat at around 38. Based on this level, the Turkish lira has depreciated by 6.7% since the beginning of the year. The lira finished 2024 with a limited loss of 16.5%.