Foreign exchange reserves of the Turkish Central Bank increased to $108.6 billion at the end of June from $98.5 billion at the end of May, with the Turkish Ministry of Treasury and Finance set to seek new sources of external injections, Turkish Finance Minister Mehmet Simsek said on Tuesday
ISTANBUL (Pakistan Point News / Sputnik - 11th July, 2023) Foreign exchange reserves of the Turkish Central Bank increased to $108.6 billion at the end of June from $98.5 billion at the end of May, with the Turkish Ministry of Treasury and Finance set to seek new sources of external injections, Turkish Finance Minister Mehmet Simsek said on Tuesday.
"On May 26, the Central Bank's reserves amounted to $98.5 billion, and by June 30, they had already reached $108.6 billion dollars, while net reserves increased by $14.2 billion during the same period. Such a rapid growth of reserves is encouraging," Simsek wrote on Twitter.
Simsek said that one of the major goals of his reform program is to improve the situation with international reserves.
The minister added that the finance ministry will continue to implement a rational economic policy and to search for new sources of external injections to quickly increase the Central Bank's reserves.
Since the end of last week, the Turkish authorities have raised three times, to $760, the customs duty on smartphones imported into Turkey from abroad, increased VAT from 18% to 20%, and also increased taxes on gambling, while notary services have become one and a half times more expensive.
Turkish Central Bank head Hafize Gaye Erkan said at a meeting with chairmen of major banks that there will be no more support of the Turkish lira exchange rate at the expense of the Central Bank's foreign exchange reserves, local media reported on July 3.
On June 22, Turkey's central bank raised its key rate from 8.5% to 15% for the first time in more than two years, in a reversal of its inflation-fighting policy. The decision was made at the regulator's first meeting under Erkan's leadership. Many analysts expected a sharper increase, as Turkey's annual inflation stood at 39.6% in May.
In recent years, Turkish President Recep Tayyip Erdogan has pursued a policy of keeping the interest rate low. The Central Bank decreased the interest rate from 19% in early 2021 to 8.5% last February. The Turkish currency has lost more than 80% of its value in the past five years, and 44% of its value in 2021 alone.
