Central Bank Governor Karahan makes statement on gold reserves

Central Bank of the Republic of Turkey (TCMB) Governor Fatih Karahan made significant remarks regarding the Central Bank's reserve management, based on gold reserves. Banks' swap transactions and liquidity status were also on the agenda.

Governor Karahan pointed out that activating gold-based transactions during periods when foreign exchange liquidity is needed is a natural strategy. He also emphasized that the majority of the transactions are carried out in the form of forward gold-foreign exchange swaps. In Karahan's words, "A significant portion of the transactions are in the nature of forward gold-foreign exchange swaps. That is, when the maturity date arrives, the gold in question will return to our reserves."

Stating that they have adopted a proactive and flexible approach to reserve management, Karahan noted that their goal is to strengthen price and financial stability. On this subject, he said, "We are following a proactive, flexible, and controlled approach regarding our reserve management and liquidity tools. Our goal is to strengthen price stability and financial stability."

Karahan also touched upon the measures they have taken against external negative factors during the fight against inflation. Expressing their determination to continue tight policy implementations for the continuation of the process, the Central Bank Governor stated, "We are facing an external situation that negatively affects our fight against inflation. We are determined to maintain the tightness required for the continuation of the disinflation process."

Evaluating swap transactions as well, Karahan pointed out that the renewed interest of banks in swap transactions with the TCMB shows that there is no problem with foreign exchange liquidity and that the foreign exchange rate regime is functioning healthily.

Economic circles interpreted Karahan's statements as a message of transparency and market confidence in the Central Bank's reserve policy.