Türkiye’s economy chief on Tuesday said the rapid rise in reserves of the country’s central bank was “encouraging,” stressing rational policies and efforts to ensure a continued inflow of additional foreign exchange.
Treasury and Finance Minister Mehmet Şimşek’s remarks came as data showed the Central Bank of the Republic of Türkiye’s (CBRT) net reserves climbed by $14.2 billion (TL 370.75 billion) from May 26 through the end of June.
The central bank’s gross reserves climbed from $98.5 billion to $108.6 billion, according to data from the monetary authority.
“The rapid increase observed in reserves in recent times is encouraging,” Şimşek wrote on Twitter. “Our efforts to contribute to the Central Bank’s reserve increase and provide additional external resources to our country are also progressing rapidly.”
Türkiye’s economic authorities have taken steps since President Recep Tayyip Erdoğan was reelected on May 28, including changing course after two years of monetary easing.
Erdoğan reshuffled his economy team and named Şimşek, the respected veteran policymaker, as treasury and finance minister and Hafize Gaye Erkan, a former Wall Street banker, as central bank governor.
The overhaul was seen as an initial sign that Ankara would revamp policies centered around monetary stimulus and opt for interest rate hikes to combat stubborn inflation, stabilize the volatility in the Turkish lira and rebuild foreign exchange reserves.
Since then, the central bank has hiked its policy rate to 15% from 8.5% and pledged further tightening to fight inflation, while the government has introduced tax and fee hikes to ramp up budget income.
Şimşek said Tuesday the new economy team’s program aims to accumulate international reserves as much as market conditions allow.
He noted that in addition to the rational policies meant to boost the reserves, the country’s efforts to provide additional foreign resources continue at full speed.
“We will continue to take the necessary steps to continue the (economic) recovery,” he stressed.
Turkish officials said they expect investments from Gulf states after Şimşek and Vice President Cevdet Yılmaz traveled to the United Arab Emirates (UAE) last month and held talks with counterparts. The duo met with UAE President Sheikh Mohamed bin Zayed Al Nahyan.
The two officials visited Qatar last weekend, met officials and discussed economic cooperation opportunities.
Şimşek and Erkan are set to travel to Saudi Arabia on Wednesday to meet with officials and investors, Anadolu Agency (AA) said Tuesday. It will mark Erkan’s first trip abroad as CBRT governor.
Şimşek will meet his Saudi counterpart Mohammed bin Abdullah Al Jadaan, it added.
The trip comes ahead of Erdoğan’s scheduled visit to leaders in Saudi Arabia, Qatar and the UAE on July 17-19.
Since 2021, when Ankara launched a diplomatic effort to repair ties with Saudi Arabia and the UAE, investments and funding from the Gulf helped boost Türkiye’s foreign reserves and stabilize the lira.
Ankara has secured some $28 billion in foreign currency swap deals in recent years, including from the UAE. Last year, Abu Dhabi’s International Holding Co. acquired via a subsidiary a 50% stake in Türkiye’s Kalyon Enerji for $490 million.
Erdoğan said last week that his new economy team accelerated efforts to increase foreign direct investment inflows.
