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2.0 Politics
2.1 Autumn is coming
The Turkish central bank’s open FX and gold swap stock slightly declined to $58.2bn at end-July from $58.9bn at end-June, lagged data from the authority showed on August 28.
According to calculations based on the data, Turkey burnt through $12bn of international reserves in July to fix the USD/TRY at 6.85. That brought the total loss of reserves since the beginning of 2019 to $106bn.
When the state banks’ short FX position and the central bank’s short USD-TRY position at Borsa Istanbul derivatives market are taken into account, overall interventions in the USD/TRY market since the beginning of 2019 are seen at above $120bn.
The state lenders’ FX position is another mystery as it is unknown how much FX-denominated domestic government bonds have been used to limit their deficit.
The government has closed the short FX position of state banks with USD-linked domestic papers. It passed $12bn in July. The short position fell to $4.85bn as of August 28.
5 TURKEY Country Report October 2020 www.intellinews.com
