Türkiye’s central bank has reached an agreement with the Saudi Fund for Development to settle a $5 billion deposit received last year, as part of efforts to reduce external liabilities.
The central bank announced on Wednesday that it had reviewed its international deposit processes to better manage reserves and reduce external debts. A bilateral agreement was reached with Saudi Arabia to end the $5 billion deposit deal made last year.
The deposit, placed on March 6, 2023, was part of a broader strategy to strengthen relations between Türkiye and Saudi Arabia, following directives from King Salman and Crown Prince Mohammed bin Salman.
This repayment signals a positive shift in Türkiye’s economic management under Finance Minister Mehmet Şimşek, who has focused on reducing the central bank’s foreign exchange interventions and improving the country’s financial stability.
Central Bank Governor Fatih Karahan noted that the bank had largely stopped swap operations with local banks and was reviewing international agreements. Experts see this as a step toward a more straightforward monetary policy.
In a social media post, Şimşek highlighted that Türkiye’s reserves had strengthened due to increased foreign inflows and reduced reliance on external financing, and he confirmed ongoing economic and financial cooperation with Saudi Arabia.
In other news, Fitch Ratings said that Gulf Cooperation Council (GCC) banks are showing a strong appetite to grow their presence in major regional markets, particularly Turkiye, Egypt and India, attracted by improving economic conditions and better growth opportunities than in their domestic markets.
Fitch Ratings noted that Several GCC banks are reportedly looking to acquire banks in Turkiye, Egypt and India. The agency said it believes external growth is part of some GCC banks’ strategy to diversify business models and improve profitability. By deploying capital into high-growth markets.
