Erdogan admits Gulf funds "relieved central bank, even if for a short while"

Erdogan admits Gulf funds "relieved central bank, even if for a short while"
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The net forex reserves of the Turkish Central Bank are in deficit for the first time since the recording of data began.

Days to the presidential election runoff in Turkey, President Recep Tayyip Erdogan, who will run for a third term on Sunday, admitted in a live broadcast that funds recently provided to Turkey by Gulf states relieved the central bank and the financial market, although only briefly.

Responding to questions in a live broadcast by CNN Turk on Thursday, Erdogan said:

"Our economy, our banking and financial system are pretty solid. Meanwhile, some countries from the Gulf and such stocked money in our system. This relieved our central bank and market, even if for a short while."

"After Sunday's election, you will see how these leaders will come here, or how I will visit them to show gratitude," he added.

Turkey has secured some $28 billion in currency swap deals in recent years with the United Arab Emirates, Qatar, China and South Korea, most of which are believed to be in the Turkish central bank's reserves.

The foreign funds have offset declines in the bank's forex reserves, which on a net basis dropped into negative territory last week for the first time since 2002, the year Erdogan's Justice and Development Party (AKP) came to power.

Turkey's forex buffer has been depleted mostly due to years of an unorthodox policy of stabilizing the local currency, which has undergone a series of crashes sparked by interest rate cuts in the face of soaring inflation.