The central bank’s reliance on foreign exchange swaps has dropped sharply, marking a structural improvement in the quality of the bank’s international reserves.
According to recent central bank data, the share of swap-funded foreign currency within gross reserves fell to 7.7%. This represents a drop of nearly 59 percentage points from its 2023 peak of 67%.
In real terms, for every $100 in gross foreign exchange reserves held by the central bank, $67 originated from temporary swap agreements in 2023. But today that figure stands at $7.70. The fall reflects an 88.5% reduction in swap dependency.
The swap share stood between 50% and 65% in early 2024. Then the decline started. By mid-2024, increased domestic liquidity and lower reliance on short-term bank arrangements drove the ratio below 20%. It hit single digits across 2025 and 2026.
Economists consider the decline a positive signal for reserve quality. While swaps temporarily boost gross figures, they create future liabilities. Reducing these obligations strengthens the central bank’s net international reserves position and enhances long-term financial stability.
CB RESERVES FALL $30 BILLION IN A YEAR
Meanwhile, Goldman Sachs warned that a recent drain in total central bank reserves highlights ongoing external financing vulnerabilities.
According to central bank data, total reserves dropped by $3.8 billion during the week of Oct. 2 to $167.4 billion — marking a six-week cumulative drain of $21.1 billion. The 12-month drain reached $30 billion.
Goldman Sachs said that despite a 1-year high August current account surplus of $4.05 billion and a $4.52 billion net error and omissions inflow, long-term reserve pressures remain, forecasting Turkey's year-end current account deficit at 2.9% of GDP.
