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Turkish Central Bank’s Net FX Reserves Fall to $15.96 Billion

Turkish Central Bank’s Net FX Reserves Fall to $15.96 Billion

2022-10-29

 

In an effort to stem the outflow of foreign currency from the country, the Central Bank of the Republic of Turkey (CBRT) has deployed various measures to tighten monetary policy. In particular, the CBRT has been selling government bonds to bring down the level of its net foreign exchange reserves (NFR).

The net foreign exchange reserves of the CBRT fell $2.8 billion to $15.96 billion in February 2018, according to the most recent data released by the central bank.

In the first two months of this year, the CBRT sold a total of $2.2 billion worth of government bonds. As a result, the level of NFR fell by $1.8 billion from $28.7 billion in January 2018. The CBRT has been selling bonds in order to bring down the level of its net foreign exchange reserves. The CBRT has been implementing various measures such as these in order to stem the outflow of foreign currency and weaken the lira.

Record Lira depreciation

On January 14, the Turkish lira hit a record low of 7.24 to the dollar. In response, the Central Bank of the Republic of Turkey increased its cash reserve requirements (CRC) by 50 basis points on January 21. Although the CBRT has been selling bonds in order to bring down the level of its net foreign exchange reserves, the lira had continued to depreciate against the dollar. The Turkish government’s current account deficit widened to $8.8 billion in the fourth quarter of 2017 from $2.6 billion in the same period of 2016, according to data from the Statistics Institute of Turkey (TURKSTAT). In addition, the rising number of Turkish nationals seeking work abroad and the leaching of foreign currency through illicit trade have further exacerbated the lira’s decline.

Debt-to-GDP ratio rises

The rising number of Turkish nationals seeking work abroad and the leaching of foreign currency through illicit trade have further exacerbated the lira’s decline.

The Turkish government’s current account deficit widened to $8.8 billion in the fourth quarter of 2017 from $2.6 billion in the same period of 2016, according to data from the Statistics Institute of Turkey (TURKSTAT). In addition, the rising number of Turkish nationals seeking work abroad and the leaching of foreign currency through illicit trade have further aggravated the lira’s decline.

Net FX Reserves fall

As a result of the above developments, the CBRT’s net foreign exchange reserves fell $2.8 billion to $15.96 billion in February 2018, according to the most recent data released by the central bank.

The CBRT has been selling government bonds to bring down the level of its net foreign exchange reserves. The CBRT has been implementing various measures such as these in order to stem the outflow of foreign currency and weaken the lira.

Record high annual inflation

Inflation in Turkey accelerated in February to record high annual levels. The annual inflation rate rose to 16.85% in February from 16.49% in January and 16.04% in December. The Food Price Monitor of the World Food Programme (WFP) reported that food prices in Turkey increased by 15% in February 2018, the highest since January 2014. The WFP attributed the surge in food prices to the growing demand for basic food items, increased production costs and higher import duties.

Capital outflows accelerate

In an effort to stem the outflow of foreign currency from the country, the Central Bank of the Republic of Turkey (CBRT) has deployed various measures to tighten monetary policy. In particular, the CBRT has been selling government bonds to bring down the level of its net foreign exchange reserves (NFR).

The net foreign exchange reserves of the CBRT fell $2.8 billion to $15.96 billion in February 2018, according to the most recent data released by the central bank.

In the first two months of this year, the CBRT sold a total of $2.2 billion worth of government bonds. As a result, the level of NFR fell by $1.8 billion from $28.7 billion in January 2018. The CBRT has been selling bonds in order to bring down the level of its net foreign exchange reserves.

Conclusion

 
 

In an effort to stem the outflow of foreign currency from the country, the Central Bank of the Republic of Turkey (CBRT) has deployed various measures to tighten monetary policy. In particular, the CBRT has been selling government bonds to bring down the level of its net foreign exchange reserves (NFR).

The net foreign exchange reserves of the CBRT fell $2.8 billion to $15.96 billion in February 2018, according to the most recent data released by the central bank.

In the first two months of this year, the CBRT sold a total of $2.2 billion worth of government bonds. As a result, the level of NFR fell by $1.8 billion from $28.7 billion in January 2018. The CBRT has been selling bonds in order to bring down the level of its net foreign exchange reserves.

The Turkish lira hit a record low of 7.24 to the dollar on January 14, 2018. The lira rebounded somewhat in February but still remained at a very low level a month later. The fall in Turkish exports and growing demand for foreign currencies by Turkish nationals working abroad have been major factors behind the depreciation of the lira.

Record Lira depreciation

On January 14, the Turkish lira hit a record low of 7.24 to the dollar. In response, the Central Bank of the Republic of Turkey increased its cash reserve requirements (CRC) by 50 basis points on January 21. Although the CBRT has been selling bonds in order to bring down the level of its net foreign exchange reserves, the lira had continued to depreciate against the dollar. The Turkish government’s current account deficit widened to $8.8 billion in the fourth quarter of 2017 from $2.6 billion in the same period of 2016, according to data from the Statistics Institute of Turkey (TURKSTAT). In addition, the rising number of Turkish nationals seeking work abroad and the leaching of foreign currency through illicit trade have further exacerbated the lira’s decline.

Debt-to-GDP ratio rises

The rising number of Turkish nationals seeking work abroad and the leaching of foreign currency through illicit trade have further aggravated the lira’s decline.

The Turkish government’s current account deficit widened to $8.8 billion in the fourth quarter of 2017 from $2.6 billion in the same period of 2016, according to data from the Statistics Institute of Turkey (TURKSTAT). In addition, the rising number of Turkish nationals seeking work abroad and the leaching of foreign currency through illicit trade have further aggravated the lira’s decline.

Net FX Reserves fall

As a result of the above developments, the CBRT’s net foreign exchange reserves fell $2.8 billion to $15.96 billion in February 2018, according to the most recent data released by the central bank.

The CBRT has been selling government bonds to bring down the level of its net foreign exchange reserves. The CBRT has been implementing various measures such as these in order to stem the outflow of foreign currency and weaken the lira.

Record high annual inflation

Inflation in Turkey accelerated in February to record high annual levels. The annual inflation rate rose to 16.85% in February from 16.49% in January and 16.04% in December. The Food Price Monitor of the World Food Programme (WFP) reported that food prices in Turkey increased by 15% in February 2018, the highest since January 2014. The WFP attributed the surge in food prices to the growing demand for basic food items, increased production costs and higher import duties.

Capital outflows accelerate

In an effort to stem the outflow of foreign currency from the country, the Central Bank of the Republic of Turkey (CBRT) has deployed various measures to tighten monetary policy. In particular, the CBRT has been selling government bonds to bring down the level of its net foreign exchange reserves (NFR).

The net foreign exchange reserves of the CBRT fell $2.8 billion to $15.96 billion in February 2018, according to the most recent data released by the central bank.

In the first two months of this year, the CBRT sold a total of

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