Page 34 - TURKRptJun20

Turkey and Egypt saw particularly large declines in held reserves while Turkey and Romania stood out for having official reserves that did not fully cover their 12-month short-term external debt repayments, it added.
The IMF-defined FX reserves, excluding gold and short-term swaps, fell below zero at end-February while the figure without the exclusion of swaps dropped into negative territory as of mid-April.
Turkey on May 20 ​announced​ that Gulf ally Qatar has agreed to raise the overall limit of its existing swap deal with Ankara to $15bn-equivalent in TRY and Qatari riyal (QAR) from $5bn.
The swap agreement between the Turkish and Qatari central banks was initially signed in August 2018 during the height of Turkey’s currency crisis with a limit of $3bn. It was amended last November to $5bn.
“Turkish officials continue to argue that hard currency buffers are sufficient. The market has the opposite view on this crucial issue,” Dutch lender Rabobank said on May 8.
“The history of financial markets (especially in the emerging market universe) is full of examples of the market proving officials wrong when it comes to the ability to defend a national currency,” it added.
Allowing the lira to enter into a genuine free-float would be the most market-friendly path to take and the most rational approach, Rabobank also said.
34​ TURKEY Country Report​ June 2020 ​ ​www.intellinews.com