Sudden collapse of Turkey’s reserves – $ 21.5 billion evaporated in one year
Turkey’s foreign exchange reserves have lost around $ 21.5 billion in one year, due to increasing pressure on the Turkish lira and scarcity of foreign exchange.
A survey prepared by Al-Ain News, based on data from the Turkish Central Bank released on Sunday, indicates that foreign exchange reserves fell at the end of January to about $ 53.3 billion.
Until the end of January last year, foreign exchange reserves managed by the Turkish Central Bank stood at around $ 74.8 billion, indicating a continuous decline between 2020 and 2021.
Data shows that the Turkish Central Bank has boosted foreign exchange reserves on a monthly basis, alongside weaker demand for the dollar locally due to lower imports from overseas, against a backdrop of weak trading power purchase in the local market.
However, Ankara is facing the persistent currency shortage crisis in the coming months, with the persistent weakness of the export sector on the one hand, and the persistent stalemate in the tourism sector on the other hand, tourism and exports being among the most important components of local dollar supply.
In addition, the figures show a decline in the value of the Turkish Central Bank’s gold reserves by the end of last month, compared to the figures at the end of 2020, as the country tends to gradually withdraw from its gold reserves to liquidate and provide an exchange.
The value of gold reserves until the end of last month was around $ 42.1 billion, down from $ 43.24 billion at the end of 2020, a decline that continues for the fifth consecutive month, especially since September 2020.
An investigation by Al-Ain News into the latest World Gold Council data released last month showed that Turkey has sold more than 36 tonnes of the yellow metal from late September last through January.
According to the data, Turkey’s total gold reserves at the end of the third quarter of last year were around 583.3 tons, while the total reserves until last month were around 547 tons, a decrease of 36.3 tonnes.
Ankara’s foreign exchange needs have grown in recent months, especially with the local currency (lira) exchange rate falling sharply against the dollar to all-time highs of 8.53 pounds to the dollar, in a context of low confidence in the local currency.
In 2020, Turkey experienced a severe shortage of foreign exchange for several reasons, including the decline in foreign exchange due to lower exports and slight growth in imports, in addition to the stagnation of the inbound tourism industry.
While the third reason is the increase of Turkish people’s purchases of foreign exchange to protect their savings from a greater decline in the value of the Turkish lira and to save foreign currency more outside official channels, amid fears of a greater decline in the abundance of dollars.
