Page 7 - TURKRptJun20

$54.4bn was already with the central bank and $14.5bn was in government paper.
In addition to the $16bn left at the lenders, the central bank had $49bn worth of gross FX reserves as of May 15, down from $77bn at end-February.
The central bank also had $36bn of gross gold reserves as of May 15. The national lender has not sold any gold reserves as yet.
The data on the central bank’s open swap stock is lagged. According to the latest statistics, the figure stood at $30bn as of end-March, while analysts calculate that more than $30bn was sold via state lenders in the first quarter of 2020.
To sum up, the administration tending to the Turkish economy had around $50bn at the central bank and $16bn (available to be swapped or to be tapped via FX-denominated domestic paper) at local lenders as of May 15, according to the latest available data. There is then the $36bn of gold at the central bank.
It should be noted that around $6bn of the $50bn is denominated in non-convertible Chinese yuan (CNY) and Qatari riyal (QAR). An additional $10bn in QAR entered the coffers of the Turkish central bank on May 20 after a swap deal expansion was agreed with Doha. That will simply help the balance sheet make-up. It’s a cosmetic job that will make it harder to follow the exact situation.
A swap deal would not even normally help with the “make-up” but the abovementioned “more than $30bn” thought to have been sold via state lenders has been calculated by working around inconsistencies in the central bank balance sheet.
Yes, there are just too many numbers and most of them are not exact figures—but we are dealing with the only possible way to have an idea as to what is going on in the lira market.
BoP, domestic demand, liquidity
With approximately $50bn in gross FX reserves, the administrators of the economy are in a position to manage the balance of payments (BoP) while avoiding a bank run at home and a liquidity crash in USD/TRY trading.
In the longer term, a sharp devaluation of the lira is unavoidable given that the country is out of joint in all respects, but it is better to leave longer term expectations to the fortune-tellers under the current global conditions.
Balance of payments
Although the officials charged with managing the Turkish economy have also managed to “zero” the reliability of the BoP data, the BoP still provides a framework for thinking on Turkey’s FX needs in its financial and economic interactions with the outside world.
Current account
According to the latest data, Turkey’s current account officially produced a $4.9bn deficit in March. The main driver was still the trade deficit, which came in at $4.3bn. There was also $1.4bn in outflows via primary and secondary income items, while services income fell sharply to $0.7bn.
In coronavirus-cursed April, the trade deficit arrived at $3.4bn, with foreign tourist arrivals (the main factor in services income) falling by 99%.
7​ TURKEY Country Report​ June 2020 ​ ​www.intellinews.com