The Central Bank’s reserves did not evaporate; places changed

Morning author Prof. Dr. Former Treasury and Finance Minister Berat Albayrak, Kerem Alkin, is responding to allegations that $ 128 billion was sold from the Central Bank’s reserves. gave. Alkin, The claim that foreign exchange reserves are “steam” is truly astonishing. But the reasons for the increase and decrease of reserves in the economy are simple and straightforward. Reserves have not evaporated, they have simply changed, as a group of enthusiastic economists claim. ” he said.

Prof. Dr. Alkin said that the current account balance, which had an annual surplus of $ 6.8 billion in 2019, turned into a deficit of $ 35.2 billion in November 2020, and this was closed from the Central Bank’s reserves. Alkin, “Simply put, compared to 2019, we have experienced a deviation of $ 45 billion in the current account balance. All these deviations are met by the CBRT’s foreign exchange reserves. The difference between $ 107.7 billion in foreign exchange reserves in February 2020 and $ 82.7 billion at the end of November is already $ 25 billion. he said.

Alkin responded to allegations that he had lost more than $ 100 billion in reserves:

“So where does the rumor that the Central Bank’s loss in foreign exchange reserves is $ 70, 80 or 100 billion come from?” In fact, the CBRT’s swap transactions with other central banks and financial institutions saw 80 percent of the bank’s share of foreign exchange reserves reach $ 65 billion, with a loss of $ 28 billion and $ 65 billion at the end of September. claimed that the loss of reserves reached 100 billion dollars.

However, they also know. The first shock of the epidemic was the need to use the reserves of the Central Bank to ensure the sustainability of the balance of payments at a time when global dollar liquidity is tightening. What would happen if the CBRT did not use the reserves during this period? What would be employment, growth, the real sector, the banking sector? Can this process be overcome with interest rate increases expressed in every crisis environment? The answer is obvious, of course.

In short, since August 2018, there have been disagreements and tensions in some countries with the last title in the US and the European Union, Feton, S-400, Libya, Syria, Levant and Nagorno-Karabakh, Turkey is an economic corner operation. We have mobilized to feed the CBRT’s resources in the current situation and we are taking many opportunities. In the fight against Kovid-19, we financed a net foreign exchange outflow of $ 41 billion from the CBRT’s balance of payments reserves alone. From 2018 to the end of 2020, the net external debt of the real sector and financial institutions will exceed $ 21 billion. In other words, the private sector has repaid $ 21 billion in net foreign debt. Of the $ 41 billion in net foreign exchange inflows in the balance of payments in 2020, $ 9 billion stems from the private sector’s net foreign debt.

It did not evaporate, but moved

Kerem Alkin explained that the reserves were not lost, but were replaced by the following words:

“So, the CBRT has no foreign exchange reserves that evaporate or disappear. First, at least $ 41 billion was used to close the balance of payments deficit by 2020, and at least $ 30 billion was used to cover the open currency position by increasing the foreign currencies of the real sector, the banking sector and households. Thus, it covers the economy within a single system, and the Turkish economy has been relocated to another $ 30 billion. We have a TCMB reserve to easily see where every unit, every penny goes.

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