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ENAG published: KKM policy reserves will fall further

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Turkey’s risk premium has reached its highest level since the last global financial crisis. The 5-year credit default swap (CDS) hit 714 basis points as the dollar hit a high of 15.88. This level was recorded as the highest level seen in the risk premium since October 2008. In October 2008, Turkey’s risk premium was 832 basis points.

Along with these developments, in the Weekly Economic Analysis report published by ENAG, it was stated that while annual inflation is predicted to increase, the Central Bank reserves will have a negative effect as a result of the increase in the debt interest burden and the currency -conserved deposit policy implemented due to the exchange rate risk will further reduce the reserves.


In the report, “When we examine the central bank reserves for the period from the end of the year to the present, approximately 25 billion dollars in foreign exchange-protected deposits (KKM), 15 billion dollars in exports, 8 billion dollars in rediscounts , and in addition to this, 16 billion dollars in SEE sales. Considering that the increase in reserves was around 32 billion dollars, we observe an increase of only 7 billion dollars. We assume that the difference in the middle is the sale of reserves to keep dry.

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