Today, some technically incorrect comments were made on social media that the exchange rate was fixed in the swap agreement with Qatar. We felt the need to publish a technical explanation on this. First of all, the statement dated 20 May 2020 on the CBRT website regarding the Qatar swap agreement, which was extended in the past few days and whose amount was expanded last year;
“The swap agreement, which was signed on 17 August 2018 between the Central Bank of the Republic of Turkey (CBRT) and Qatar Central Bank (QCB), was amended. With the swap amendment agreement, the overall limit has been increased from USD 5 billion equivalent of Turkish lira and Qatari riyal to USD 15 billion equivalent of Turkish lira and Qatari riyal. The core objectives of the agreement are to facilitate bilateral trade in respective local currencies and to support financial stability of the two countries.”
To explain technically; exchanged currencies are lira and riyal. If $15 billion is specified as the size of the swap agreement, it is the local currency equivalent of the exchanged money. In other words, the dollar is not included in the currency swap here, the national currencies change hands for a certain maturity. At the end of the maturity, the opposite is the case with the first currency swap. Riyals equal to the amount of the swap made for a temporary Nilüfer escort period are entered into the CBRT reserves, and in the same way, the transaction is manifested as a lira inflow to the Qatar central bank reserve. The cost of the swap is the interest difference between the lira and the riyal. The money temporarily included in the reserves with swap increases the gross reserves.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
