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The banks also had $8bn worth of free eurobonds (when securities held as collateral are excluded) as of July 9.
The lenders had $54bn at the central bank and $12bn in government paper.
In addition to the $26bn left at the lenders (cash + deposits at foreign banks + free eurobonds), the central bank had $50bn worth of gross FX reserves as of July 10, down from $77bn at end-February. Some $16bn is denominated in non-convertible Qatari riyal (QAR) and Chinese yuan (CNY).
The central bank also had $40bn of gross gold reserves as of July 10. 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 central bank’s open FX swap stock jumped to $52bn at end-May from $36bn a month ago after $10bn-equivalent in QAR was provided in an expanded swap line by Gulf ally Qatar.
The gold swap stock rose to $3.42bn at end-May from $2.24bn a month ago.
Calculations suggest that Turkey sold $55bn worth of FX reserves via state lenders in January-May to support the lira, following $33bn in 2019.
Goldman Sachs estimates that an additional $5bn was burnt in June, bringing the overall figure to $60bn in H1, Reuters reported on July 10.
Turkish state lenders’ net FX deficit rose further from $8.3bn as of July 2 to $9.7bn as of July 9.
Reuters noted on July 16 in a story entitled “Turkish state banks short forex to support lira, say sources and data” that the state lenders’ net FX deficit should also be taken into account in calculations of overall government interventions in the lira market.
Accordingly, overall interventions since January 2019 amount to about $103bn, including $70bn so far this year.
The central bank’s gross reserves dipped to $49bn in mid-May, just as state banks—mainly Halkbank, Vakifbank and Ziraat Bank—started increasing their short foreign currency positions, according to Reuters’ three banking sources and data from the banking regulator BDDK.
41 TURKEY Country Report August 2020 www.intellinews.com
