Turkish cenbank’s net FX reserves fall to $17 bln

A logo of Turkey’s Central Bank is pictured at the entrance of its headquarters in Ankara, Turkey October 15, 2021. REUTERS/Cagla Gurdogan

ISTANBUL, May 5 (Reuters) – The Turkish central bank’s net international reserves dropped slightly to $17.01 billion in the week to April 29, data from the central bank showed on Thursday.

The exchange rate used by Reuters was 14.7798.

Forex reserves have dropped sharply in recent years, most recently due to the billions of dollars the bank sold in market interventions to stem a currency crisis in December and address what it called “unhealthy” prices.

The lira still ended the year down 44% against the dollar in 2021, a slump which helped send inflation soaring to 70% in April, the highest under President Tayyip Erdogan’s rule.

The central bank has met the market’s need for at least $30 billion of forex since December through its reserves, in addition to direct interventions in the forex market in 2019-2020, when it sold $128 billion to support the lira.

Its net forex reserves touched a record low of $7.55 billion before moving higher.

In past years, the bank used swaps with local banks to backstop interventions, an unorthodox policy that spooked foreign investors and local savers.

Data showed the bank’s outstanding swap transactions stood at $41.90 billion as of April 29. The reserves are in negative territory once the swaps are deducted.

Note: The figures are released every week on the central bank balance sheet as per a letter of intent with the International Monetary Fund dated 18 January 2002. The figures are released in Turkish liras and are converted by Reuters to U.S. dollars using the central bank’s official exchange rate from the previous work day.

Reporting by Ali Kucukgocmen; Editing by Tuvan Gumrukcu

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