The inflow marks the first time Turkey received such a substantial amount under the lira-yuan swap agreement with Beijing that dates back to 2012.
Wednesday 14, August 2019
The People’s Bank of China transferred $1 billion worth of funds to Turkey in, Beijing’s biggest support package ever for President Recep Tayyip Erdogan, reported Bloomberg.
The cash infusion boosted Turkey’s foreign reserves around the time of Istanbul local elections that had left international investors fretting about the country’s political and financial stability.
Still, the Chinese funds show Turkey is making headway in its efforts to diversify sources of foreign investment amid unprecedented tensions with the West.
Treasury and Finance Minister Berat Albayrak has said the Asian economy is a promising partner from which Turkey needs to attract investment.
Turkey and China signed the currency-swap deal seven years ago and have renewed it every three years, however, until last week’s balance of payments data release, there was hardly ever a transfer from China under the swap deal that made a significant contribution to Turkish holdings.
Turkey has been trying to sign similar agreements with other partners and inked a deal with Qatar last year that dwarfed similar attempts. The agreement with Qatar at the height of a currency rout provided $3 billion in inflows from the Gulf state.