Oil drops below $100 on reserves release, China lockdowns

ANKARA: Turkish authorities are considering raising the share of foreign currency revenues that exporters are required to sell to the central bank to as high as 50 percent from 25 percent now, a person with knowledge of the matter said on Monday.

A final decision has not been made, the person said, requesting anonymity. Authorities could decide not to change the level or hike it by any amount to as high as 50 percent, the source added. The mandate only covers revenues in US dollars or euros. 

Turkey’s central bank declined to comment on the matter.

In January, the government mandated exporters to sell 25 percent of their foreign currency revenues to the central bank, which is seeking to bulk up its reserves in the wake of a currency crisis late last year.

The amount of foreign currency the central bank has purchased so far from exporters has not been disclosed.

The lira firmed to 14.64 after the Reuters report, strengthening 0.7 percent from Friday’s close of 14.7505.

Orhun Sevinc, executive director at the Research and Monetary Policy Department, has said rediscount loan payments (lira loans to exporters that are repaid in foreign currencies), a lira deposit protection scheme and foreign currency purchases from exporters had all helped build reserves

Turkish exports totaled $225 billion in 2021. The government and economists expect they will reach $250 billion this year.

The central bank’s net foreign currency reserves hit a record low of $7.55 billion in January, mainly due to years of market interventions to prop up the lira. They have moved higher over the past three months.

The central bank has met market demand for at least $30 billion of foreign currency since December through its reserves, in addition to direct interventions in the market in 2019-2020, when it sold $128 billion to support the lira.