S Arabia deposits $5b in Turkey’s central bank

Saudi Arabia has signed an agreement with Turkey to deposit $5 billion in the country’s central bank through the Saudi Fund for Development (SFD), the fund said on Monday.

Saudi Minister of Finance Mohammed Bin Abdullah Al-Jadaan announced his country’s intention to make the deposit in December.

While Turkey's net foreign exchange reserves rebounded from just over $6 billion last summer, when it was at its lowest in at least 20 years, they have lost some $8.5 billion since a massive earthquake hit the country's sourthern region early in February that killed more than 45,000 people and left millions homeless.

The Turkish central bank’s net international reserves fell some $1.4 billion to $20.2 billion in the week to Feb 24, data from the bank showed on Thursday. The Saudi deposit follows joint efforts by Ankara and Riyadh to mend ties that were ruptured after the murder of Saudi journalist Jamal Khashoggi in 2018 at the kingdom’s consulate in Istanbul.

Turkey’s forex reserves dropped sharply in recent years due to market interventions and in the wake of a currency crisis in December 2021. The lira lost some 30% of its value against the dollar last year and 44% in 2021.

The deposit was signed between SFD Chairman Ahmed Aqeel Al-Khateeb, who is also Saudi Arabia’s tourism minister, and Turkish Central Bank Governor Sahap Kavcioglu, the SFD statement said.

Meanwhile, Turkish Foreign Minister Mevlut Cavusoglu said on Sunday that Ankara is working hard to extend a UN-backed initiative that has enabled Ukraine to export grain from ports blockaded by Russia following its invasion. The Black Sea Grain Initiative brokered by the United Nations and Turkey last July allowed grain to be exported from three Ukrainian ports. The agreement was extended in November and will expire on March 18 unless an extension is agreed.