Türkiye’s net foreign exchange reserves surged nearly $5 billion last week, with total reserves up almost $2 billion, bankers’ calculations showed on Wednesday, resuming an uptrend since it adopted a more orthodox monetary policy following the May elections.
The bank’s reserves slumped to minus $5.7 billion in early June, their lowest since data publication began in 2002, as authorities sought to counter forex demand and stabilize the lira over the election period.
They have since recovered strongly.
According to calculations by five bankers, obtained by Reuters, net reserves rose $4.9 billion to $15.8 billion last week, while total reserves climbed to $115.6 billion. The bank will announce official data at 2:30 p.m. on Thursday.
Under new Governor Hafize Gaye Erkan, the central bank has hiked the rate by 900 basis points in the last two months.
The recent uptrend in reserves reversed in the week to July 28, with net forex falling $2.8 billion to $10.89 billion.
Under measures introduced last year, the central bank boosted reserves by buying at least 40% of exporters’ forex income, amounting to around $100 billion annually. This was then sold by the bank to support the lira in a practice halted since the elections.
The central bank continues to get foreign exchange from tourism and a scheme to protect lira bank deposits from depreciation known as KKM.
Meanwhile, Turkish Vice President Cevdet Yılmaz said on Tuesday there was agreement at a meeting of government officials and business leaders on the need for a patient and persistent approach to combat the country’s chronic high inflation.
Speaking after the meeting, Yılmaz said that it was important to limit government spending and that the government’s medium-term program will include structural reforms, with more flexible policies planned for companies to finance exports and production.