Türkiye seizes on foreign influx to maintain sharp FX reserve buildup

The sharp increase in Türkiye’s foreign exchange reserves maintains its pace, as the country continues to seize on the foreign influx to replenish its financial buffer.

The Central Bank of the Republic of Türkiye’s (CBRT) net international reserves rose by $6.51 billion from the previous week, reaching $40.35 billion in the week through May 24.

This marks the highest level since January 2020 and a recovery of $26.34 billion over the past four weeks.

Total reserves rose by $3.17 billion compared to the previous week to $142.24 billion as of May 24, the latest weekly data showed on Thursday.

The value of gold reserves decreased by $1.05 billion, while the gross foreign exchange reserves increased by $4.22 billion.

Over the past four weeks, the increase in total reserves amounted to $18.16 billion.

The growth in reserves began at the start of May, attributed to heightened foreign interest and reduced demand by local citizens for foreign currency.

The CBRT’s net international reserves, excluding swaps, inched closer to positive territory last week.

They improved to around minus $6 billion, from minus $14.1 billion in the week through May 17.

They hit a record low of minus $65.5 billion on March 29.

Bankers predict that the net reserves, excluding swaps, are expected to turn positive for the first time in a long period this week.

That view was echoed by Treasury and Finance Minister Mehmet Şimşek.

“We are very close. Concerns about our reserves will soon be largely off Türkiye’s agenda,” Şimşek said on Wednesday.

“However, we are still at the beginning of our journey, and it’s important to remember that,” he told a business event in Istanbul.