ANKARA: Turkish authorities plan to increase the share of foreign currency earnings that exporters are required to sell to the central bank to 50% from the current 25%, a person with knowledge of the matter said on Monday.
A final decision has not been made, the person said, speaking on condition of anonymity. Authorities could decide not to change the level or increase it by any amount up to 50%, the source added. The mandate only covers income in US dollars or Euros.
Turkey’s central bank declined to comment on the matter.
In January, the government asked exporters to sell 25% of their foreign exchange earnings to the central bank, which is seeking to boost its reserves following a currency crisis late last year.
The amount of foreign currency the central bank has purchased from exporters so far has not been disclosed.
The lira strengthened to 14.64 after the Reuters report, strengthening 0.7% from Friday’s close at 14.7505.
Orhun Sevinc, executive director of the Research and Monetary Policy Department, said rediscount loan payments (loans in lira to exporters that are repaid in foreign currency), a lira deposit protection scheme and purchases foreign exchange from exporters had all helped to build up reserves.
Turkish exports totaled $225 billion in 2021. The government and economists predict that they will reach $250 billion this year.
The central bank’s net foreign exchange reserves hit a record high of $7.55 billion in January, largely due to years of market interventions to support the lira. They have increased over the past three months.
The central bank has met market demand for at least $30 billion in foreign exchange since December through its reserves, in addition to direct market interventions in 2019-20, when it sold $128 billion for support reading it.