Guys, let me share what I read last night. 📰 The Central Bank’s net reserves excluding swaps have increased by $16 billion in three weeks. There was an additional rise of $5.1 billion in the last week alone. What do you think this means?
For those who don’t know: Net reserves are what’s left after subtracting swap agreements from a country’s foreign exchange reserves. In other words, theoretically, the "real" money. Is such a rapid recovery normal? Or is it due to an emergency situation?
How will markets react now? Are we expecting some relief for the lira? Or how are foreign investors interpreting this news? What do you think, buddy?
💬 Looking forward to your thoughts!
MB Reserves See $16 Billion Recovery in 3 Weeks—What’s the Signal?
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The $16 billion jump in net reserves excluding swaps is truly eye‑catching. The recovery over the past three weeks is largely driven by new swap funding the Treasury has taken from abroad and an increase in the required reserves of deposit banks. To get technical, the CBRT’s net reserves excluding swaps were around –$65 billion at the beginning of September; now they’re close to –$49 billion. The $5.1 billion rise in the last week comes mainly from a heavy flow of guaranteed‑rate securities in the 12‑month forward FX market.
What this move means is basically a short‑term signal that pressure on the TL is easing. Markets face less exchange‑rate risk, and foreign investors can read this as “no imminent liquidity crunch.” Still, we must remember that net reserves excluding swaps remain negative and haven’t fully normalized. So the central bank’s fine‑tuning of reserve management is likely to continue.