Central Bank sold 25 billion dollars in foreign currency! Fatih Karahan explained day by day

Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan held an information meeting for international investors following recent developments that shook the markets. Treasury and Finance Minister Mehmet Şimşek also attended the meeting, which was held via teleconference. Karahan emphasized that the market volatility was temporary.

CENTRAL BANK INTERVENED IN FOREIGN CURRENCY

Following the investigations into the Istanbul Metropolitan Municipality (IBB), the Central Bank took action due to the turmoil in foreign exchange markets starting from March 19. According to sources attending the meeting, the foreign currency sales made in the first three days were as follows:

Wednesday, March 19: 10 billion dollars

Thursday, March 20: 3 billion dollars

Friday, March 22: 12 billion dollars

It was learned that a total of 25 billion dollars in foreign currency was sold over 3 days.

"THE MARKET CAN ALREADY MAKE THIS CALCULATION"

Karahan stated that this foreign currency sale could also be seen through market data. Sending a message of transparency, the CBRT Governor expressed that they continue to take market-friendly steps. Karahan also stated that these interventions were temporary and planned in a way that would not harm the natural functioning of the market.

One of the questions asked at the meeting was about the dollar demand of domestic investors. Karahan stated, "Foreign currency demand is shaped according to the return on the Turkish Lira and market volatility. As the return increased, the demand for foreign currency decreased."

Furthermore, speaking about the CBRT's disinflation strategy, Karahan emphasized that this policy is not indexed to the exchange rate:

"We are not tied to the real effective exchange rate. The supply-demand balance will continue to be the determining factor."

Karahan reported that there was a value loss of approximately 4 percent in the foreign currency basket as of March, and that its reflection on inflation could be in the range of 30-40 percent. This statement is being closely followed by the markets, especially in terms of inflation targets.

Stating that they could intervene if necessary outside of regular meetings, Karahan said, "The CBRT continues to make decisions on a meeting basis, but interim meetings can be held when necessary." This statement was interpreted as a sign of flexibility in monetary policy.

WHO ATTENDED THE MEETING?

The meeting, hosted by Citigroup and Deutsche Bank, was attended by numerous investors from North America, the United Kingdom, Europe, and the Middle East. Portfolio managers and direct investment representatives had the opportunity to evaluate the latest developments in the Turkish economy firsthand.