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Turkey’s central bank has returned a $5 billion deposit to Saudi Arabia, highlighting Ankara’s progress in rebuilding its foreign currency reserves as part of its economic recovery efforts.
The deposit agreement between Turkey and the Saudi Fund for Development, signed in March 2023, was mutually terminated, as announced by the Turkish central bank on Wednesday.
This move by Turkey to end the agreement reflects President Recep Tayyip Erdoğan’s shift towards more conventional policies following his re-election in May 2023, which has helped stabilize the country’s $1 trillion economy.
Erdoğan stated, “Turkey is on the right path and is making steady progress towards its goals,” pointing to Moody’s Ratings recent decision to upgrade Turkey’s credit rating by two notches.
Under the leadership of finance minister Mehmet Şimşek, policymakers have been focused on replenishing Turkey’s foreign currency reserves, which had been depleted in previous years under Erdoğan’s low interest rate policies and pre-election spending spree.
The removal of the $5 billion Saudi deposit is not expected to impact Turkey’s net foreign assets, which have seen a significant recovery since the election in May 2023.
Şimşek mentioned that despite ending the deposit agreement, the collaboration between Turkey and Saudi Arabia on economic and financial matters will continue.
Recent visits by senior Saudi officials to Turkey indicate the ongoing normalization process between the two countries, with agreements being signed in various sectors such as defense and coordination.
The statement from the official Saudi Press Agency highlighted the progress in Saudi-Turkish relations across political, economic, and security domains.
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