Saudi Arabia has signed an agreement with Turkey to deposit five billion dollars in its central bank through the Saudi Arabian Development Fund (SFD), the SFD reported on Monday.
Saudi Arabia’s finance minister, Mohammed bin Abdullah al-Zadan, expressed his country’s willingness to make a deposit in December, Agerpres reported.
While Turkey’s net foreign exchange reserves have recovered from just six billion dollars last summer, the lowest in 20 years, they have lost about 8.5 billion US dollars since the February earthquakes.
Net foreign reserves at Turkey’s central bank fell to around $20.2 billion in the week ended February 24.
In recent years, Turkey’s reserves have declined significantly following market interventions and the December 2021 currency crisis. The Turkish lira has depreciated approximately 30% against the dollar in 2022 and 44% in 2021.
According to the SFD press release, the agreement for the deposit was signed by the President of the SFD, Ahmed Aqeel Al-Khatib, and the Governor of the Central Bank of Turkey, Sahab Kavçoğlu.
While Western countries avoid investing in Turkey, Ankara appeals to “friendly” countries for the foreign exchange resources needed for its policy of supporting the national currency, balancing supply with demand for the currency.
Turkey’s central bank bought 23 tons of gold in January, the world’s biggest buyer of the precious metal in the first month of the year.
The economic effects of the earthquake in Turkey could result in a loss of up to 1% of the country’s GDP, which is worth 819 billion dollars this year, according to a report released by the European Bank for Reconstruction and Development (EBRD).
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