Turkey to run out of net foreign currency reserves this week – TD Securities

“Before all buffers are depleted, we think the CBRT will hike rates dramatically and likely introduce tight capital controls”

Turkey’s central bank will run out of foreign currency reserves, net of liabilities, this week, according to TD Securities.

The bank could also exhaust its total foreign exchange reserves by the third week of July, or by the third week of September at the latest, economists at the broker said, according to currency analysis website FXStreet.

“Before all buffers are depleted, we think the CBRT will hike rates dramatically and likely introduce tight capital controls,” the broker said. “Turkey may also seek multilateral support if this scenario materializes”.

Turkey’s net foreign currency reserves were less than $1 billion, according to calculations using official data, prior to a decision last week by monetary policymakers to slacken limits on banks’ currency swaps with the central bank. The measure may raise $5 billion in swap lines, Reuters reported at the time.

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