ISTANBUL: The Turkish central bank’s net international reserves dropped $1.44 billion to $6.07 billion in the week to July 8, its lowest level since at least 2002, data from the central bank showed on Thursday.

The exchange rate used by Reuters on Thursday was 17.2601. The net forex reserves dropped to $7.38 billion on June 17 but rose to just above $7.5 billion in the following two weeks.

Forex reserves have dropped sharply in recent years, most recently due to the billions of dollars the bank sold in market interventions in the wake of a currency crisis in December.

The lira ended the year down 44% against the dollar in 2021, a slump which helped send inflation soaring to 78.62% in June, the highest under President Tayyip Erdogan’s rule.

The currency is down nearly 25% against the greenback this year.

Turkish inflation seen above 78% in June, just below 70% at end-2022

The central bank has met the market’s need for more than $30 billion of forex since December through its reserves, in addition to direct interventions in the forex market in 2019-2020, when it sold $128 billion to support the lira.

Its net forex reserves touched $19.13 billion on April 15 before beginning to decline again.

In past years, the bank used swaps with local banks to backstop interventions, an unorthodox policy that spooked foreign investors and local savers.

Data showed the bank’s outstanding swap transactions stood at $37.79 billion as of Wednesday. The reserves are in negative territory once the swaps are deducted.