Saudis expected to deposit $5 billion in Turkish central bank
Saudi Arabia is close to making $5 billion deposit with Turkey, Reuters said on Tuesday, citing a Saudi Ministry of Finance spokesperson.
"We are in final discussion to make a $5 billion deposit with the central bank of Turkey," the spokesperson was quoted saying.
While the Turkish central bank reportedly declined to comment on the issue, a Turkish official with the knowledge of the matter said discussions are at the final stage with Saudi Arabia over a swap or deposit agreement.
The swap deals the Central Bank of the Republic of Turkey (TCMB) earlier made in local currencies amount to $28 billion, according to Reuters. The bank had signed a deal with China for $6 billion, with Qatar for $15 billion, with the United Arab Emirates for around $5 billion.
The swap and deposit agreements are of crucial importance for TCMB, and for the Turkish economy in general, as the central bank's foreign currency reserves have been depleted in market interventions conducted in response to a severe currency crisis in the last couple of years.
According to Turkish economist Mahfi Egilmez, former deputy undersecretary of the Ministry of Treasury and Finance, the net reserves of TCMB as of 30 September 2022 is minus $59.2 billion.
A deposit deal with Saudi Arabia would help Turkish President Recep Tayyip Erdogan walk on less slippery ground before the coming elections in June 2023.