Turkey and the United Arab Emirates have signed a three-year currency swap deal worth $4.9 billion, the central bank said in a statement. The Turkish central bank said in an emailed statement that the agreement aims to strengthen bilateral trade and enhance financial cooperation between the two countries. It was stated that the nominal size of the agreement was 18 billion UAE dirhams ($4.9 billion) or 64 billion Turkish liras.

Swap agreements with other countries are one of the practices of the Central Bank in recent years to increase reserves. In this context, a new swap agreement was signed with the United Arab Emirates, amounting to approximately 5 billion dollars, including finance and foreign trade relations. These steps are; From a general perspective, it affects the gross reserves positively. We, on the other hand, look at the event more in terms of net reserves and net reserves excluding swaps. While net reserves are around 8 billion dollars in the current table, there is an extremely negative picture of minus 56 billion dollars in net reserves excluding swaps.

A large part of the central bank reserves consist of debt reserves originating from swaps made with banks and other countries. We also evaluate that borrowed reserve resources were not used very efficiently within the scope of the foreign exchange sales made in December last year. The figure revealed from the analytical balance sheet indicates the use of reserve resources of approximately 15 billion dollars, if we also consider that there may have been an indirect foreign exchange intervention due to the market effect. We see the swap agreement with the UAE as positive to increase the gross reserves, just like other similar agreements, and we think that it will not change the overall composition.

Kaynak: Tera Yatırım
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