The Turkish central bank has sold a total of $44.3 billion of its reserves since the start of the Middle East war to stabilize the Turkish lira amid market volatility, according to bank data for the period February 28 – March 30, quoted by the website “Türkiye Today“, BTA reported.
The bank's governor Fatih Karahan said that during this period the financial institution used currency swaps and gold to limit the economic impact of the conflict, adding that the demand for swaps shows that there is no shortage of foreign exchange liquidity.
According to calculations by economist Hakan Kara, based on the bank's analytical balance sheet, in the week from March 23 to 29, the bank sold a total of $21.5 billion of its reserves, which is the highest weekly level in history.
Commenting on the bank's actions in his publication in Ex, Kara pointed to structural factors affecting the availability of foreign exchange, highlighting capital outflows and the current account deficit. "If serious measures can be taken to curb the external deficit, the situation can be managed. For this purpose, a clear slowdown in demand and lending should be allowed at first," the economist commented.
The central bank's actions have led to a sharp decline in total reserves during this period, noted Türkiye Today. According to the bank's latest statement, its gross reserves stood at $177.45 billion for the week ending March 20, while net reserves, adjusted for swaps, fell to $43 billion, reflecting continued intervention in foreign exchange markets.