The question everyone was asking has been answered: How many dollars did the Central Bank sell during the 'İmamoğlu operations'?
The surge in foreign exchange rates and gold prices, which escalated following the detention of Ekrem İmamoğlu, was curbed by the Central Bank's historic foreign currency sales and interest rate hikes. The amount of dollars sold by the Central Bank over 3 days has drawn attention. So, what is the total amount sold by the Central Bank in those 3 days? Here are the details...
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On Wednesday, March 19, Turkish markets were shaken by the news of Ekrem İmamoğlu's detention. The rise in political tension created a shock effect on foreign exchange rates and gold prices. The dollar/TL exchange rate climbed to 41 lira, while the euro exceeded 45 lira. Gram gold tested the 4,000 lira level, showing investors a historic peak. In Borsa Istanbul, circuit breakers were triggered twice.
EXCHANGE RATE FLUCTUATED
The sudden rise in the exchange rate peaked at 41 lira on Wednesday before gradually declining following the Central Bank's interventions. On Thursday and Friday, although the dollar/TL attempted to exceed the 39 lira level, it could not hold above it. The week closed with the dollar exchange rate up 3.2 percent against the TL.
26 BILLION DOLLARS IN SALES IN 3 DAYS
The main factor that stopped the upward movement of the exchange rate was the Central Bank's harsh measures. It was calculated that the Central Bank sold 12 billion dollars in foreign currency to the market during the first shock wave on Wednesday.
On Thursday and Friday, an additional 14 billion dollars in sales were made in total, curbing the excessive rise in the exchange rate. Thus, a total of 26 billion dollars in foreign currency was sold within 3 days.
The Central Bank's gross foreign exchange reserves had fallen to 64 billion 967 million dollars in April 2024. As of last week, reserves had reached 98 billion 69 million dollars. In other words, an increase of 33.1 billion dollars in gross reserves had been recorded in one year. However, the 26 billion dollars in foreign exchange sales made just this week corresponds to 79 percent of the reserve increase in the last year.
INTEREST RATES WERE RAISED
Following the Central Bank's foreign exchange sales, another important step was taken on Thursday. The Monetary Policy Committee (PPK) held an extraordinary meeting and increased the overnight lending interest rate from 44 percent to 46 percent. In the statement made after the decision, it was stated that developments in the market could threaten the inflation outlook, and the following expressions were used:
"Considering the risks that developments in financial markets may pose to the inflation outlook, measures supporting a tight monetary stance have been taken."
In addition, it was announced that one-week repo auctions would be suspended for a certain period.
FIRST TIME SINCE 2007
The Central Bank's latest move came to bring liquidity under control. In the statement made on Friday, it was reported that liquidity bills with maturities of up to 91 days were issued to withdraw excess TL liquidity remaining in the market. This practice was last implemented by the Central Bank in July 2007. Only banks and brokerage firms that have an Open Market Operations Framework Agreement with the Central Bank can participate in these bill auctions.