The reserves of Türkiye’s central bank could show a record rise this week following the nationwide municipal elections, according to traders.
The supply-demand balance in the foreign exchange market has started to shape significantly in favor of the Turkish lira, four traders told Reuters, after last month’s surprise interest rate hike by the central bank and the completion of the local elections.
Reserves have slipped back this year after rebounding sharply since early June – just after presidential and parliamentary elections – when they were down to minus $5.7 billion, their lowest since data publication began in 2002.
Local corporate investors sold $3 billion worth of foreign exchange last week, after the Central Bank of the Republic of Türkiye (CBRT) raised its key policy rate by 500 basis points to 50%, according to the traders.
The surprise rate hike halted the decrease in reserves that approached $25 billion since the beginning of the year.
Foreign inflows became more visible this week after the weekend’s local elections in which President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AK Party) ranked behind the main opposition for the first time ever, traders also say.
Turkish central bank started accumulating more than $1 billion in reserves daily as of Tuesday, they added. The foreign exchange losses had reached up to $8.5 billion on a weekly basis within last month.
The CBRT declined to comment on the matter.
Be First to Comment