ANKARA Following steep drops in March and April, Turkiye’s central bank increased its foreign exchange purchases last week, increasing its overall reserves by an additional $7.5 billion, according to calculations made by bankers using data released on Tuesday.
A policy change, including an increase in the bank’s benchmark interest rate last month, was brought on by market turbulence in March after the arrest and imprisonment of Istanbul Mayor Ekrem Imamoglu, President Tayyip Erdogan’s principal political opponent. According to calculations made by bankers using early data, the central bank’s net reserves increased by $8 billion to $48 billion last week.
According to statistics, the central bank reversed course and purchased around $13 billion in the previous three weeks after selling over $57 billion to assist stabilise the lira and other financial markets amid the unrest.
At the top band of the rate corridor, which was also boosted earlier to prevent market turbulence, overnight interest rates, which had momentarily fallen to the main policy rate level of 46 percent on Friday, recovered to 49 percent this week. To get more clues about the policy route ahead, traders are examining whether overnight rates will remain near the top range of the rate corridor, which is 49%, in the days ahead.
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