Turkey sells $4.15 billion in foreign currency to state-owned enterprises

Turkey sells $4.15 billion in foreign currency to state-owned enterprises

Sales of foreign currency to Turkey's state economic enterprises – primarily energy importer Petroleum Pipeline Corporation (BOTAŞ) – reached a record $4.15 billion (TL 56.30 billion) in January, the central bank said Monday.

The surge came after a plunge in the lira and a jump in energy prices. The January data brought forex sales to state enterprises in the last three months to $9.7 billion, after levels of $3.36 billion in the previous two months – both record levels at the time – with energy imports accounting for the vast majority.

The Central Bank of the Republic of Turkey (CBRT) has been selling forex to BOTAŞ since 2014. Reuters reported in November that BOTAŞ was expected to turn to the bank to meet its growing forex needs as gas prices and demand climb during the winter months.

The lira weakened 44% to the dollar last year after the central bank slashed its policy rate by 500 basis points since September. The currency has held steady in 2022 and was flat at 13.5505 at 8:30 a.m. GMT. 

The lira hit a record low of 18.4 in late December but rebounded after state interventions to support it and the announcement of a scheme to boost lira deposits by protecting them against depreciation. 


Monday's data also showed the lender bought $1.55 billion of forex in January in the form of export rediscount credit repayments. Total repayments were some $21 billion in 2021 – the biggest contribution made to its reserves last year.

The volume of deposits under the lira protection scheme now exceeds TL 290 billion, the head of Turkey's banking watchdog said last Thursday, up from some TL 200 billion in late January. 

Last month, corporate deposits were added to the scheme, and those deposits were subsequently exempted from corporate income tax. In the wake of the scheme, Turkish locals' forex and gold holdings dropped more than $4 billion to $228.16 billion as of Jan. 28, their lowest level since July.

Central bank net international reserves rose more than $1.2 billion last week to $10.53 billion. (Source)

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