Thu. Jun 1st, 2023

In Turkey, the country’s economy is under severe pressure due to the inflation rate exceeding 85%. In such a case, the deposit of money by Saudi Arabia can help to increase Turkey’s foreign exchange reserves.

File photo IANS
File photo IANS


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According to a statement issued by the spokesman of the Ministry of Foreign Affairs of Saudi Arabia on Tuesday, the two countries are discussing about the deposit of five billion dollars by Saudi Arabia to the Central Bank of Turkey.

“We are in the final stages of negotiations to deposit five billion dollars with the Turkish central bank,” the spokesman said in an email sent by Reuters to a Saudi foreign ministry spokesman.

On the other hand, the Central Bank of Turkey has refused to comment in this regard. However, a Turkish official familiar with the talks said that negotiations on an agreement to deposit money from Saudi Arabia are in the final stages.

Bloomberg, an economic news magazine, also confirmed that Saudi Arabia is in the final stages of negotiations to offer aid to Turkey.

What will Turkey benefit from depositing money?

It should be noted that the Turkish economy is currently under severe pressure as a result of the increase in the inflation rate of more than 85% and the continuous decline in the value of the Turkish currency, the lira. In such a case, the deposit agreement could help boost Turkey’s dwindling foreign exchange reserves.

Analysts believe that the cash infusion by Saudi Arabia could help Turkish President Recep Tayyip Erdogan boost popular support ahead of elections in June next year.

If this agreement is reached, it will also be a sign that bilateral relations have been restored after the end of tension between the two countries for many years.

The Erdoğan government has been negotiating with several Gulf Arab countries this year for financial assistance. Turkey’s Finance Minister Nuruddin Nabati has been leading efforts to seek financial support from Saudi Arabia, Qatar and the United Arab Emirates.

The Central Bank of Turkey has entered into local currency exchange agreements with the central banks of many other countries. It has signed agreements worth $6 billion with China, $15 billion with Qatar and nearly $5 billion with the United Arab Emirates. Earlier, President Erdoğan said that Turkey’s foreign exchange reserves have reached about 130 billion dollars.

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