The Central Bank of the Republic of Türkiye’s total reserves rose by $4.19 billion in the week to Oct. 9 to $171.58 billion, weekly data released on Thursday showed, driven by a jump in foreign currency holdings.
Gross foreign exchange reserves increased by $4.24 billion to $64.57 billion from $60.33 billion a week earlier. Gold reserves edged down by $54 million to $107.01 billion, leaving gold as the larger part of the bank’s holdings.
Why reserves matter
Reserves are a key gauge of Türkiye’s ability to defend the lira and meet external obligations. They fell sharply in previous years when authorities sold foreign currency to support the currency, and rebuilding them has been one of the main goals of the orthodox policy adopted since mid-2023 under Finance Minister Mehmet Şimşek and the central bank.
The weekly figures report gross reserves. Analysts also follow net reserves and net reserves excluding swap agreements with local banks, which give a clearer picture of the central bank’s own firepower, but these were not included in the release reported by Hürriyet.
Lira demand and policy outlook
The rise comes after central bank Governor Fatih Karahan said this week that demand for lira assets had held up despite outflows from some investment funds, and pledged to keep monetary policy tight until inflation is firmly on a downward path.
Annual consumer inflation eased to 29.73% in September, below market expectations. The bank’s policy rate stands at 37%, and its Monetary Policy Committee is scheduled to meet on Oct. 22.
Gold makes up a large share of the reserves because of central bank purchases in recent years and the high value of the metal, which has rallied on global risk concerns. Changes in gold prices can therefore move the total even when the bank is not buying or selling.
For foreigners holding savings or investments in Türkiye, stronger reserves are generally seen as reducing the risk of sudden swings in the lira, although the currency has continued to weaken gradually against the dollar and euro in line with the central bank’s policy of keeping real returns positive.
Sources
Photo: Gargarapalvin / CC BY 4.0, via Wikimedia Commons
