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The Central Bank of Türkiye (Turkey) is terminating its $5 billion deposit transaction with Saudi Arabia in a show of economic confidence less than two weeks after the country received a revised growth forecast of 3.6% from the International Monetary Fund (IMF), up from April’s 3.1%, according to its World Economic Outlook report.
The Central Bank said it was reviewing its international deposit transactions to reduce external liabilities as part of reserve management, resulting in the termination of the deposit transaction of $5 billion carried out with the Saudi Fund for Development in 2023, by mutual agreement.
“Our external liabilities have recently improved by approximately USD 7 billion through the reduction of deposit balances,” the Central Bank further stated.
In a post on X, Türkiye’s Minister of Treasury and Finance Mehmet Simsek wrote the move comes in light of the country’s reserves, which have strengthened as a result of increased foreign resource inflows, reverse dollarization and decreasing external financing needs.
“Our cooperation with Saudi Arabia on economic and financial matters will continue,” he added.
Last week, international credit ratings agency Moody’s also upgraded Türkiye’s ratings to ‘B1’ from ‘B3’, with positive outlook. The country's Improvements in governance and increasingly well-established return to orthodox monetary policy were cited as reasons for the upgrade.
In March, the Saudi fund granted a $55 million loan to Ankara to support infrastructure projects following the earthquake that devasted parts of the country in 2023 that resulted in the death of more than 53,000 people.
(Reporting by Bindu Rai, editing by Daniel Luiz)
