The total reserves of Türkiye’s central bank are estimated to have risen to a historic peak of $136.5 billion last week, bankers’ calculations showed Tuesday, maintaining an upward trajectory after the monetary authority embraced more conventional policymaking following the May elections.
Calculations by five bankers project a $2 billion rise in the Central Bank of the Republic of Türkiye's (CBRT) total reserves for the week ending Nov. 24, according to Reuters news agency.
The earlier record in the reserves, which rose to $134.5 billion in the week to Nov. 17, stood at $135.96 billion in December 2013.
The relevant data can be deduced from CBRT's analytical balance sheet data and leading indicators. Official data is set to be disclosed on Thursday.
The upward momentum has persisted since June, coinciding with President Recep Tayyip Erdoğan's appointment of respected veteran policymaker Mehmet Şimşek as Treasury and Finance minister and former Wall Street banker Hafize Gaye Erkan as CBRT governor.
The new administration reversed a yearslong easing cycle and delivered aggressive interest rate hikes in a bid to tackle the country’s long-term inflation issue.
Since June, the central bank embarked on a 3,150 basis-point tightening cycle – including hikes of 500 basis points in each of the last three months.
Bankers' calculations suggest a $38 billion increase in total reserves from June to last week, rising from $98.5 billion at the end of May following the elections.
The increase in CBRT's reserves is also observed in other calculation methods closely monitored in the market. CBRT's net reserves, excluding swaps, improved from -$53 billion to -$51 billion.
Bankers estimated that international net reserves increased between a range of $6.6 billion and $7 billion last week. This lifts the net reserves to about $36 billion, up from $29 billion the previous week.
The increase in international reserves, which hit the lowest value in data history at -$5.7 billion on June 2, has surpassed $41 billion since the elections.
Investors have been signaling a renewed interest in Turkish markets following the May vote.
Recent reports, including analyses from international institutions like Deutsche Bank and JPMorgan, suggest that Turkish lira-denominated investment instruments will stand out among developing country markets in 2024.
CBRT officials last week said they had started to observe fund inflows into the lira from large-scale institutional investors based on the West Coast of the United States. They indicated that ongoing discussions suggest these inflows will continue.
The central bank has scheduled an "Investor Day" event for Jan. 11 in New York, adopting this format for the first time. While similar meetings are regularly organized by the bank, the theme of "Investor Day" will be introduced for the first time.
