Turkish Central Bank’s forex reserves decrease to three-year low

Neşe Karanfil - ANKARA

The Turkish Central Bank’s gross foreign currency reserves have decreased to below $100 billion for the first time since 2012.

According to data from the bank, the reserves were announced at $117.9 billion at the start of the week of Sept. 23, but only $99.5 billion of the reserves are in foreign currency, with the remainder being comprised of gold reserves. The gross forex reserves had not dipped below the $100 billion since November 2012.

President Recep Tayyip Erdoğan first voiced the need to increase the bank’s total reserves above $100 billion in 2010. While the gross forex reserves, which constitute the lion’s share of the total, were around $70 billion at the end of 2010, this figure rose to $80 billion at the end of that year. The reserves surpassed the $100 billion level on Nov. 30, 2012, reaching their highest level at $115 billion in 2013.  

The total reserves, however, decreased by $781 million to $117.9 billion last week, while the bank’s forex reserves also decreased from $100.3 billion to $99.5 billion over the same period of time. 

“The Central Bank has asked state-run banks to prepare a report about how the foreign currency needs of energy-importing state-run entities, such as BOTAŞ, can be met by these banks, instead of the bank itself,” a source told Reuters. 

Such a move was signaled by Central Bank Gov. Erdem Başçı on April 30. 

According to the bank’s data, around $9.23 billion of forex was sold to state-run energy importers by the bank between December 2014 and August 2015.

The Central Bank tweeted on Oct. 2 that a majority of such entities’ forex needs is still met by the Treasury and the bank itself if needed.