Turkey’s central bank posted an extraordinary daily profit of about $ 10 billion on the last day of 2021, sparking questions about what caused this benefit that will end up in the country’s Ministry of Finance, Bloomberg reports.
The monetary authority had forecast an annual loss of about 70 70 billion ($ 5.2 billion) on December 30, but ended the year with a profit of 60 60 billion, an unprecedented change of fortune in one day, according to its daily balance sheet. In February, the Ministry of Finance – as the largest central bank stakeholder – will start collecting much of this amount as dividends.
The sharp reversal comes after President Recep Tayyip Erdogan unveiled measures aimed at compensating pound investors for any losses. Erdogan’s pressure on the central bank to cut benchmark interest rates pushed the pound against the dollar last year, pushing inflation to 36%. Goldman Sachs predicts that the situation will worsen in 2022.
The bank declined to comment on the emergency move on its balance sheet, which was first reported on Monday by former bank deputy Ibrahim Turhan and former banker Kerim Rota, both members of the opposition Prime Minister Gelecek Partisi. Ahmet Davutoglu. Two officials familiar with the matter told Bloomberg News that they agreed with the auditors’ advice, but asked not to be named because of the sensitivity of the matter.
According to Turhan, a possible explanation for the significant increase in overnight profits could be found in the backdoor sale of foreign exchange reserves at the Ministry of Finance. The devaluation of the pound makes foreign exchange reserves more valuable in local currency, but this can not be recorded in the profit column until the reserves are sold, he said.
The same amount of dollars will then have to be bought back to maintain stock levels, Turhan said.
The Treasury Department’s lending program for the current three-month period showed that authorities expect 44 44 billion in revenue next month.
Petros Kranias
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Source From: Capital
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