Turkey: Gross foreign exchange reserves increase to 60 billion dollars

According to the weekly data released by the Central Bank of the Republic of Turkey, total foreign currency deposits increased by $2.07 billion in the week of July 14, adjusted for the parity effect. Compared to the previous week, foreign currency deposits of real persons increased by 270 million dollars, while foreign currency deposits of legal entities increased by 1.80 billion dollars.

Foreign currency deposits of domestic residents increased by 878.9 million dollars. According to the data announced by the Central Bank of the Republic of Turkey (CBRT), the foreign exchange deposits of domestic residents, which were 208 billion 913.9 million dollars last week, reached 209 billion 622.8 million dollars in the week ending July 14. In the week of July 14, foreign currency deposits of real persons decreased by 463.30 million dollars compared to the previous week and became 131 billion 495.80 million dollars, foreign currency deposits of legal entities increased by 1 billion 342.10 million dollars and became 78 billion 126.90 million dollars.

Gross foreign exchange reserves increased by $1.09 billion compared to the previous report. According to the CBRT data, the gross reserves, which were 58 billion 867 million dollars last week, reached 59 billion 955 million dollars in the week that ended on 14 July. CBRT gold reserves reached 39 billion 409 million dollars from 39 billion 784 million dollars. Thus, the CBRT’s total reserves, which were 98 billion 651 million dollars last week, reached 88 billion 365 million dollars last week. In the same period, the CBRT’s net international reserves increased by 283 million dollars. Net international reserves, which were 6 billion 73 million dollars last week, reached 6 billion 356 million dollars in the week ending 8 July.

Foreigners continue to exit TRY assets regularly. With the global risk aversion, it is expected that the outflow of TRY assets abroad will continue. As the central bank adheres to the loose monetary policy, the Turkish lira continues to lose. Despite rising inflation, policy makers left policy rates at 14%. Rather than raising interest rates, policy makers are taking macroprudential measures to reduce credit demand and combat runaway inflation. As a result, the gap between loan rates and Central bank indicators has reached the highest level since 2011 data. Meanwhile, the 5-year state CDS also rose to 832.

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 consider that this distinction is 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 is at the level of 54.60% as of the week of July 8, a slight increase is observed from the rate that was 54.39% in the previous week. This rate was 55% in the same period of last year.

Kaynak: Tera Yatırım
Hibya Haber Ajansı