Saudi Arabia Says Close to Making $5 Bln Deposit with Turkey

On Tuesday, a spokesman of the Saudi Ministry of Finance said that the Kingdom of Saudi is considering making a deposit of $5 billion with the Central Bank in Turkey.

"We are in final discussion to make a USD 5 billion deposit with the central bank of (Turkey)," the spokesperson said in an emailed response to a Reuters query.

The Turkish central bank declined to comment on the issue. A Turkish official with the knowledge of the matter said discussions are at the final stage with Saudi Arabia over a swap or deposit agreement.

Turkey's economy has been badly strained by a slumping lira and soaring inflation of over 85% and a swap or deposit agreement could boost Turkey's diminished foreign currency reserves.

Analysts say this could also help President Tayyip Erdogan shore up support ahead of elections due by June 2023.

Turkey's central bank has swap deals in local currencies with several of its counterparts worth a total of $28 billion. It signed a deal with China for $6 billion, with Qatar for $15 billion, with the United Arab Emirates for around $5 billion.

The momentum of talks between the countries' central banks comes after Ankara and Riyadh's joint effort to mend ties that were ruptured after the murder of Saudi journalist Jamal Khashoggi in 2018.