The total reserves of the Turkish central bank had renewed their historic high by reaching nearly $145.5 billion (TL 4.29 trillion) in the week ending Dec. 22, the official data shared Thursday showed.
The reserves of the Central Bank of the Republic of Türkiye (CBRT) surged by $2.92 billion from the week earlier to $145.45 billion, according to the weekly data shared by the bank, maintaining the upward trajectory observed following the elections earlier this year and a shift to more conventional policymaking.
The bank's foreign exchange reserves totaled $97.55 billion, up by $2.16 billion every week, while the gold reserves also rose by $767 million to $47.9 billion over the same period.
The central bank witnessed a significant increase in reserves post-election, which, including the latest rise, surged by nearly $47 billion, corresponding to a rise of 47.7%.
Following the election, the central bank embraced more conventional monetary policies encompassing aggressive rate hikes aimed at curtailing inflation and reducing the foreign trade gap.
The bank gradually lifted its key policy rate, also known as the one-week repo rate, to 42.5% from 8.5%, suggesting, however, in its latest committee meeting, that it was closer to the finish line by saying it expects to "complete the tightening cycle as soon as possible."
Officials, including Vice President Cevdet Yılmaz and Trade Minister Ömer Bolat, have recently touted Türkiye's economic policies and voiced optimism for the upcoming year despite the global political and economic conditions, including slower economic growth and ongoing conflicts in Gaza and Ukraine.
Türkiye is envisaged to close 2023 with a national income that exceeds $1 trillion, Bolat said earlier this week, while its outbound shipments are also expected to reach a historic high owing to record-breaking monthly exports in last five to six months.
In addition, he said the budget deficit is projected to be lower than initially forecast, potentially at 5.5% of gross domestic product (GDP) instead of 6.4%, due to political stability and effective policies.
President Recep Tayyip Erdoğan, in a speech Thursday, touched upon the historic record observed in central bank reserves and said a drop in inflation was observed in recent months.
"Figures indicate that the inflation rate has decreased in recent months. The loss of momentum in inflation would be seen more clearly in the coming period," he said during a meeting with mukhtars in the capital, Ankara.
He also recalled that the monthly minimum wage was raised by 49% to TL 17,002 for 2024, adding that, "Once again, citizens will not be allowed to 'be crushed' under inflation."
Highly anticipated, the new monthly wage was announced a day earlier by Labor and Social Security Minister Vedat Işıkhan. Türkiye had already raised the minimum monthly salary to a net TL 11,402 earlier in June.
Annual consumer price index (CPI) edged slightly up in November to nearly 62%, according to official data, but has significantly regressed from 85.51% last October, which marked a 24-year peak.
Curbing price increases has been the top priority for the monetary authority and authorities, and they expected the cooling of prices to take effect from the second half of next year, with a target of 36% for year-end.
At the same time, reducing a foreign trade gap by boosting exports and providing incentives for exporters has been on the agenda. The government also began to roll back an FX-protected scheme in August to encourage people to keep their savings in the Turkish lira and witnessed a decline of around TL 700 billion drop in the volume of these accounts since.
"The structure of our exports and imports has been discussed in all its aspects. Additional steps have been discussed to reduce the import dependence of our exports and to increase our country's share in global trade, focusing on increasing technology-intensive and high-value-added exports," a written statement shared after Economy Coordination Committee's meeting chaired by Yılmaz on Thursday, read.
At the same time, a significant decrease was observed in the country's credit default swaps (CDS), which fell from around 700 basis points in May to below 300 basis points currently.