AKP deputy chair explains what happened to Turkey's Central Bank reserves

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Ruling Justice and Development Party (AKP) Deputy Chair Nurettin Canikli has responded to the claims about the 128 billion dollar deficit in the Central Bank's foreign exchange reserves.

Thirty-six billion dollars from the reserves was used for gold imports and 75 billion dollars was bought by real and legal persons, he said on Twitter last night (April 13).

"The private sector has paid 43 billion dollars of foreign currency debt abroad. Foreign portfolio investors bought 12 billion dollars and took them abroad," he wrote.

Opposition parties and economists have criticized the government for draining the Central Bank reserves in order to keep the exchange rate of the US dollar low during the spell of Berat Albayrak, the son-in-law of President and AKP Chair Recep Tayyip Erdoğan, as the finance minister.

The amount of money that is estimated to be sold during these efforts is 128 billion dollars. Therefore, "Where is 128 billion dollars?" has become a slogan of the opposition, often seen in Twitter's trending topics over the past months.

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"When we add these four items, it reaches 160 billion dollars. This figure is well above 128 billion dollars. This doesn't mean that the Central Bank made sales of 160 billion dollars in 2019 and 2020," Canikli wrote. "Because periodic shifts may occur in the accrual of payments. This table shows us that 128 billion dollars were used in the financing of the above-mentioned payments.

The Central Bank has made all direct and indirect foreign currency sales at the market price and did not sell dollars to anyone below its market price, Canikli underlined.

During Albayrak's tenure, the government kept the interest rates low as part of Erdoğan's theory suggesting that higher interest rates cause higher inflation.

After Albayrak's resignation in early November, the government has changed this policy, gradually raising the interest rates from 10.25 percent to 19 percent.

However, the opposition has kept calling the government to account as the dollar's exchange rate hasn't significantly changed since then. As of today, one US dollar is traded at 8.06 Turkish lira. (EKN/VK)