The Turkish central bank's net international reserves, excluding swaps, rose last week into positive territory for the first time since early 2020, a top economy policymaker said on Monday.

The net reserves, excluding swaps, rose to $1.5 billion last week, signifying a nearly $67 billion increase since the March 31 local elections, Reuters and Anadolu Agency (AA) reported.

They hit a record low of minus $65.5 billion on March 29.

"Excluding swaps, net reserves turned positive last Friday for the first time since the beginning of 2020. Negative reserves are no longer an issue. We are not relying on short-term resources," Treasury and Finance Minister Mehmet Şimşek said.

The growth in reserves began at the start of May, attributed to heightened foreign interest and reduced demand by local citizens for foreign currency.

Şimşek described the influx of foreign capital as unprecedented in the nation's history and said the government's medium-term economic program was "working better than expected."

"There has been an inflow of $65 billion into the central bank in the last two months," he told an interview with the private broadcaster NTV.

Official data last week showed that the Central Bank of the Republic of Türkiye's (CBRT) net international reserves rose some $6.5 billion to $40.35 billion in the week to May 24, their highest level since January 2020.

According to bankers' calculations, net reserves rose another $5 billion last week to stand at $45.5 billion.

Total reserves increased by around $1.5 billion to $143.5 billion, up from $142.24 billion in the week through May 24.

Şimşek also said that inflation was on the verge of a lasting decline.

But he stressed all stakeholders "need to be patient, and we are determined."

"Resolving price rigidity in services will take time. Prices in the automotive and real estate sectors are decreasing, and the decline in inflation is being felt," he added.

Earlier on Monday, official data showed Türkiye's inflation reached an annual 75% in May, in what is said to mark the peak before a series of interest rate hikes and a relatively stable lira bring relief.

Shortly after the data release, Şimşek said the "worst is left behind," and relief will begin this month.

"The transition period in the fight against inflation is completed; we are entering the disinflation process," he wrote on social media platform X, formerly Twitter.

Foreign inflows, narrowing current account deficit

Şimşek said there has been a net foreign inflow of approximately $17 billion in the past 12 months.

"The proportion of foreigners in bonds is approaching 10%. I believe there will be a significant inflow of funds once confidence in our ability to reduce inflation increases," he noted.

"We cannot rely on hot money in the money market. Banks can also access long-term financing."

Considering current commitments or those that will turn into commitments, Şimşek said more than $60 billion would be channeled into Türkiye over the next three years.

Şimşek also cited a downward trend in imports, saying that the improvement in the current account deficit is progressing "better than expected."

Exports rose by 4.5% to $106.9 billion from January through May, while imports fell 9.3% to $143.7 billion, official data showed on Monday.

"We are experiencing quality and balanced growth. The current account deficit is gradually narrowing. As of May, the current account deficit will have decreased to $25 billion," Şimşek said.

The current account gap in 2023 stood at $45.2 billion, down from $48.8 billion in 2022. The annualized shortfall reached as high as $57 billion last May. It narrowed to $31.2 billion as of this March, according to the official data.

"The ratio of the current account deficit to national income will fall below 2.5%" at the end of the year, said Şimşek.

He also said the government has reached the final stage of its work on a reform to ensure fairness and efficiency in taxation.

The minister said a significant portion of corporate taxpayers in Türkiye have been declaring losses for many years.

"We are examining exemptions and exclusions."