Page 34 - TURKRptJul20

According to the latest available data, the additional FX liquidity of the Turkish banking industry was $16bn ($5.4bn at home and $10.5bn held in foreign bank accounts) as of May 15. The figure stood at $19bn as of May 1 and at more than $20bn in April. The figure declines as the central bank increases the banks’ swap limits and taps lenders via domestic paper.
The lenders actually had $85.3bn of FX liquidity to their names as of May 15 but $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 figure rose to $56bn as of May 22 thanks to $10bn-equivalent in Qatari riyal (QAR) provided in an expanded swap line by Gulf ally Qatar. It seems $3bn had evaporated, ceteris paribus. Some $16bn of the $56bn is denominated in QAR and Chinese yuan (CNY).
The central bank also had $37bn of gross gold reserves as of May 22. The national lender has not sold any gold reserves as yet and gold prices are on the rise.
The data on the central bank’s open swap stock is lagged. According to the latest statistics, the figure jumped to $36bn at end-April from $30bn as of end-March. This figure will jump to at least $46-50bn in May.
After the April data was released on May 28, Haluk Burumcekci of Burumcekci Consulting calculated that there was around $11bn worth of inconsistencies on the central bank balance sheet, bringing the total amount to $44bn for January-April and to $77bn from January last year to April 2020. These amounts are thought to have been sold via state lenders to support the embattled Turkish lira (TRY).
More dollar selling took place in May to boost the Turkish currency and offset an outflow of funds, bringing total sales this year to more than $50bn, Reuters quoted unnamed bankers as saying on May 29.
The Treasury is set on June 5 to redeem $2bn worth of eurobonds. They were sold in two parts, in 2005 and 2007, and pay a 7% coupon.
On May 18, the Treasury quietly redeemed €2bn worth of eurobonds, sold in two parts in 2010. They paid a 5.125% coupon.
Together with interest payments, the Treasury repaid $2.74bn in external debt in May. It will repay another $2.42bn in June, according to data from the finance ministry.
From July 2020 to February 2021, the Treasury will repay around $500mn on average per month on external debts. Repayments will total $4.45bn over eight months until March 2021, when $4.5bn will be repaid, including a eurobond redemption.
Away from the Treasury, the only scheduled redemption by a Turkish eurobond seller during the remainder of this year is scheduled for August when Mersin Port will redeem $450mn (already refinanced).
The Turkish Treasury sold $2bn of 5-year eurobonds with a 4.25% coupon and $2bn of 10-year paper at 5.45% in February.
In what’s left of 2020, the Treasury has Japanese yen (JPY) 60bn of samurai bonds maturing in December. It could at least seek some refinancing options here. Reuters has frequently reported of late that Turkish officials are in talks with the Japanese and that Japan’s troubled PM Shinzo Abe will be providing
34​ TURKEY Country Report​ July 2020 ​ ​www.intellinews.com