Şimşek dismisses claims about intervention in FX rates

ANKARA

Treasury and Finance Minister Mehmet Şimşek has dismissed claims that the Central Bank intervened in foreign exchange rates by selling its reserves.

The Treasury and the Central Bank are working to make Turkish Lira instruments more attractive, Şimşek wrote on X, formerly known as Twitter.

The claim that the Central Bank intervened in the exchange rates by selling reserves to keep the rates at a targeted level does not reflect the truth, he said.

The latest data from the Central Bank showed that its gross reserves stood at $75.96 billion in the week ending on Aug. 25, declining from $76.29 billion from the previous week.

The U.S. dollar/Turkish Lira rate declined below 27 liras after the Central Bank delivered a larger-than-expected rate hike on Aug. 24. The bank lifted its policy rate, the one-week repo auction rate from 17.5 percent to 25 percent.

In late August, the Central Bank announced steps toward unwinding the FX-protected savings accounts scheme, known as KKM.

It stopped targeting conversion from foreign currency deposits to FX-protected lira deposits under KKM as part of the simplification process.

“The regulations are intended to increase Turkish lira deposits while decreasing FX-protected deposits by ensuring the transition from FX-protected accounts to Turkish lira deposits,” the bank said in a statement on Aug. 20.