In Barclays’ report, “We expect an additional $17 billion improvement in foreign currency reserves from mid-August to the end of 2024. Since the elections, the CBRT has increased its gross reserves by $17 billion, but for the rest of the year, the trend slowed to $2 billion more as seasonality reversed in the fall. “Our methodology shows an additional $14bn recovery in reserves in 2024. The recovery in foreign exchange reserves will be greater if financing flows from the UAE come in a more front-loaded way than we expect.” it was said.
In the annual analysis of the international credit rating agency Moody’s on the Turkish economy, “Before the elections, the CBRT intervened to limit the rate of depreciation in the exchange rate. This caused significant decreases in reserves. However, the evidence shows that major currency interventions are now over.” expressions were used.
In the analysis, it was emphasized that the market-induced depreciation of the Turkish lira helped exporters regain their competitiveness, while enabling the CBRT to regain its foreign exchange reserves.
Central Bank’s reserves carried their upward trend to the 8th week
Meanwhile, the gross reserves, which were at the level of 98.5 billion dollars as of the end of May this year, rose to 115.6 billion dollars as of the week of 4 August.
While the upward trend in reserves was carried over to the 8th week in a row, the increase in reserves in the last 2 months reached 17.1 billion dollars. In this period, net reserves increased by $20.1 billion to $15.7 billion.
Analysts drew attention to the fact that the increase in reserves continued in August, when the return on Currency Protected Deposits (KKM) was at a record level, and stated that the steps taken by the economy administration after the election were effective in this course.
On the other hand, Turkey’s 5-year credit risk premium (CDS), CBRT President Dr. After Hafize Gaye Erkan’s statements at the Inflation Report Information Meeting on July 27, it accelerated its decline and fell below 400 basis points.
Analysts stated that this decrease in CDS level reflected the interest of foreign investors in Turkey. This interest, which was reflected in the market indicators, was also observed at the JP Morgan Turkey Economic Forum meeting, where Treasury and Finance Minister Mehmet Şimşek and CBRT President Erkan met with foreign investors.