No unforeseen incidences regarding reserves: Turkish Central Bank
The recent fluctuations in the Turkish Central Bank’s reserves are driven by ordinary transactions and periodic factors, the bank said in a statement on March 25.
“There are no unforeseen incidences,” the statement added.
The recent fall in the Turkish Central Bank’s foreign currency reserves stemmed from sales of forex to energy-importing firms and a foreign debt payment, worth $5.3 billion in total, a Central Bank official told Reuters on March 22.
The Turkish Lira’s value decreased more than 4 percent against the dollar on March 22, hitting as high as 5.84 and closing at 5.76, according to Reuters. In the early trading on March 25, the lira/dollar parity was floating around 5.62.
In its statement on March 25, the Turkish Central Bank also vowed to “closely monitor fluctuations and unhealthy price formations in financial markets” and to “use all monetary policy and liquidity management instruments to maintain price stability and support financial stability, if deemed necessary.”
“The Central Bank is decisive about its policy towards reinforcing its reserves. Accordingly, an uptrend was observed in the reserves following the financial market volatility observed last year,” it added.
“The macro indicators pertaining to the Turkish economy point that the rebalancing process continues thanks to the coordinated policy actions,” it added.
According to data from the central bank, Turkey’s current account shortfall shrank 88.4 percent in the first month of this year to $813 million. The deficit was $7 billion in the same month of 2018.
The country’s new economic program, announced in September 2018, targets a current-account-deficit-to-GDP ratio of 3.3 percent this year.
Bank reserves strong: Governor
Main policy of Turkey's Central Bank is to keep the bank reserves strong and further reinforce them, governor of the bank said on March 25.
"Last year, there was some decline in reserves following the financial market volatilities. However, we have witnessed an uptrend since then. We aim to sustain this trend in a robust manner. Our stance is clear in this regard. It is normal to observe fluctuations in gross reserves from time to time. This is not an extraordinary case. For sounder analyses, reserve developments should be monitored in light of
medium-term trends," Murat Çetinkaya said in an exclusive interview with Anadolu Agency.
"The Central Bank continues to use all available instruments to achieve price stability and support financial stability. We are shaping our monetary policy stance with a focus on bringing inflation down to single digits in the shortest time possible," he added.