It was announced that a new swap agreement of 3.6 billion USD was signed between Turkey and China. We already had a $2.4 billion swap agreement with China. Thus, the total amount of the swap agreement between the two countries reached 6 billion USD.
The main function of the swap agreement will be to increase the gross reserves numerically. Let’s clarify the swap thing; It has a numerical contribution to the gross reserves, yes, but the swap is also a liability. Since China will have TRY and we will have yuan, it must be converted to a valid currency. Currency swaps between the two countries will be made in reverse, at the maturity date. So basically, the China swap deal shows the CB balance sheet better, but does not make it better. China has made such swap agreements in order to facilitate foreign trade in recent years. Such swap agreements are expected to contribute to the development of trade in local currencies.
The yuan is not a liberalized currency even though it is included in the SDR basket. We cannot classify yuan as a hard currency just like USD or EUR. We have to be cautious about our reserve adequacy. Regarding swap agreements in the previous months; a “hard currency” based swap could not be made from developed Western countries; Qatar and China alternatives were evaluated.
Today, A multi-dimensional and strategically important meeting will be held between Biden and Mr. Erdoğan. The market was based on a very positive scenario and realized its pricing behavior in that way. It is expected that issues such as the S-400/F-35 issue, regional developments, foreign trade, our positioning and alliance within NATO, and the US’s Syria and Libya policies will be discussed. The main reason for optimism is the expectation that the current situation with the USA will not lead to a more negative position than it is now. It can be expected that the balances will be maintained while the cards are played, the dialogue will continue and the main issues of disagreement will be tried to be gradually advanced with lower level contacts in the future.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı