Turkey: Gross foreign exchange reserves fall to 70.8 billion dollars

According to the weekly data released by the Central Bank of the Republic of Turkey, total foreign currency deposits decreased by 847 million dollars in the week of August 26, adjusted for the parity effect. Compared to the previous week, foreign currency deposits of real persons decreased by 471 million dollars, while foreign currency deposits of legal entities decreased by 376 million dollars.

According to the summary of the weekly international reserves of the Central Bank of the Republic of Turkey; Gross foreign exchange reserves decreased by $665 million from the previous report.

After three weeks of strong foreign inflows of 724 million dollars in BIST, we see foreign outflow, albeit limited. We observe that the share of foreigners increased to 35.11% with the recent foreign inflows and then started to decline again. This outlook indicates that some strong external exits may have taken place this week. While the rise in BIST is strengthened by external inflows, it is expected that the rise in the index will be replaced by profit sales if external inflows stop and outflows continue. We think that after the foreign inflows stop, the uptrend in BIST will lose its momentum and there may be profit sales, albeit limited.

TL has been depreciating against the dollar for the last 9 weeks. The rise in banking shares in the stock market has gained momentum. The 5-year CDS is trading down at 775 basis points.

At the current level, we will continue to follow the trends in the FX-linked product focused on dollarization, reserve cumulation and financial stability. In addition, although a breakdown of FX and TRY accounts has not been published, we consider that this distinction is 55% conversion from FX to TRY and 45% direct TRY account opening in line with the statements of the Ministry of Treasury and Finance. The financial dollarization rate is at the level of 53.1% as of the week of August 26, an increase is observed from the rate of 52.7% in the previous week. This rate was at the level of 54.7% in the same period of the previous year.

Kaynak:Tera Yatırım-Enver Erkan
Hibya Haber Ajansı