Turkey's central bank's net international reserves fell to their lowest level since 2002 at $8.63 billion on Dec. 24, from $12.16 billion in the previous week, according to data released by the bank that reflected recent interventions in the market, according to Reuters.
The exchange rate used by Reuters on Thursday was 11.4508. It is worth noting that the Central Bank had announced five direct interventions in the market this month to stop the currency collapse, which bankers say amounted to between $6 to $10 billion.
There have been no notices of intervention since December 17, although bankers said the drop in reserves indicated more state support for the lira.
The latest decline puts net holdings below levels reached in April when they fell below $10 billion.
Then prices rose for most of the year before coming under pressure again after the bank’s interventions in December aimed at tackling “unhealthy” prices after the lira’s weeks-long collapse.
In 2019-2020, net reserves declined as the central bank sold $128 billion through state banks to stabilize the lira, which is still steadily declining. Such sales have emerged as the focus of what the political opposition describes as government mismanagement, and some analysts say they have started again this month, although the government denies this.
In 2019-2020, the Turkish central bank used swaps with local banks to support foreign currency interventions, an unorthodox policy that has alarmed foreign investors and domestic savers.
The data showed that the bank's outstanding swap transactions amounted to $49.770 billion as of Wednesday. Reserves are in negative territory once swaps are discounted.
Notably, the figures are published every week in the Central Bank's balance sheet according to a letter of intent with the IMF dated January 18, 2002. The figures were released in Turkish lira and converted by Reuters to US dollars using the central bank official exchange rate from the previous business day.
Follow the latest news on Google News
