Turkish finance minister denies allegations claiming ‘carry trade’ impact on central bank reserves

Türkiye’s Treasury and Finance Minister Mehmet Simsek refuted allegations linking the substantial increase in the Central Bank of the Republic of Türkiye’s (CBRT) reserves to carry trades—borrowing low-interest currency and investing in high-yield assets—stating that the reserves were boosted by rising external sources.

CBRT’s official reserve assets were recorded as USD 159.8 billion, marking a 5.1% rise from the previous month in October.

Simsek emphasized that they have removed concerns over low reserves by increasing them, pointing out that more than two-thirds of the increase came from long-term, reasonably costed external sources and portfolio preferences within Türkiye.

Simsek addressed the Turkish Parliament during his presentation on his ministry’s 2025 budget, along with Turkish Trade Minister Omer Bolat.

Highlighting the significant achievements of the Medium-Term Program implemented since the second half of 2023, Simsek said they primarily strengthened macro-financial stability. He noted that they had rebalanced the economy and increased resilience to shocks. The decrease in the current account deficit to below 1% of GDP, from 5.5%, is of great value, he added.

‘Salaries and wages increased above inflation’

Simsek reiterated their support for workers and retirees, emphasizing that wages have been raised above inflation. “We have not and will not let our employees and retirees be crushed by inflation,” said Simsek, highlighting the following data:

• The inflation rate is currently 47% and will likely drop to 45% by year-end.
• The lowest civil servant salary increased by 78%, 1.7 times inflation.
• The minimum pension increased by 68%, 1.5 times inflation.

Simsek added, “The minimum wage will likely remain above inflation as well.”

‘$57.16 million in illegal betting transactions prevented’

Resuming his speech after a break, Simsek provided data on illegal betting activities:

• The Financial Crimes Investigation Board (MASAK) analyzed 17,304 individuals.
• Suspected transactions worth over ₺2 billion ($57.16 million) were halted.
• The Information and Communication Technologies Authority blocked access to 168,030 illegal betting sites in 2023 and 222,554 in 2024.

Simsek also noted that growth in the Eastern Anatolia Project (DAP) and Southeastern Anatolia Region (GAP) regions exceeded overall growth between 2003 and 2024. He mentioned the establishment of organized industrial zones in these areas and outlined public investments:

• Southeastern Anatolia Region: ₺1.1 trillion ($31.43 billion)
• Eastern Anatolia Region: ₺1.4 trillion ($40.01 billion)
• Total: ₺2.5 trillion ($71.45 billion)

“We provide the largest incentives to these regions. If there is insufficient private sector investment, then we must seek the root of the problem in terrorism. We have done our part and will continue to do so. Reducing regional development disparities remains one of our most significant goals,” Simsek concluded.