Turkey: CBRT net reserves at the lowest level in 4 months

According to the weekly data released by the Central Bank of the Republic of Turkey, total foreign currency deposits decreased by 1.04 billion in the week of May 20, adjusted for the parity effect. Compared to the previous week, foreign currency deposits of real persons decreased by 150 million dollars, while foreign currency deposits of legal entities decreased by 892 million dollars.

The total size of currency-protected deposits, which are also monitored on the basis of reserves, was 874.8 billion TRY. Last week, 848.9 billion TRY had accumulated in these accounts. According to the data of the Central Bank of the Republic of Turkey, the gross reserve decreased to 100.3 billion dollars last week. Gross reserves were recorded as $101.9 billion in the previous week. Net reserves fell to $9.6 billion, the lowest level since the end of January. Net reserves excluding swaps fell to minus $55.1 billion last week. The previous week, that data was minus $52.2 billion.

The Central Bank did not change the policy rate as in the last four meetings. The extremely negative interest rates of the Turkish lira, adjusted for inflation, the rise in global commodity prices, and the weak internal buffers against external factors such as the rising interest rates of developed countries cause the depreciation of the Turkish lira to increase. The deepening of the current account deficit and the increase in foreign exchange demand do not bring the future expectations of the lira to a level that will help inflation recover under an extremely loose monetary policy. Despite the challenging conditions, the Central Bank does not signal a return to its orthodox monetary policy and rate hikes.

At the current level, we will continue to follow the trends in the FX-linked product focused on dollarization, reserve cumulation and financial stability. In addition, although a breakdown of FX and TRY accounts has not been published, we evaluate this distinction as 55% conversion from FX to TRY and 45% direct TRY account opening in line with the statements of the Ministry of Treasury and Finance. The financial dollarization rate was at the level of 55.42% as of the week of May 20, there was no more change than the rate that was 55.43% in the previous week. This rate was 55.4% in the same period of the previous year.

Kaynak Tera Yatırım
Hibya Haber Ajansı