Turkish cenbank to hold EGM, advance profit payment on agenda

2 minute read
Register now for FREE unlimited access to Reuters.com

ISTANBUL, Jan 18 (Reuters) - The Turkish Central Bank will hold an extraordinary general meeting (EGM) on Feb. 3, where issues on the agenda will include the advance payment of profits to the Treasury and the distribution of reserve funds, a newspaper advertisement said.

The announcement came after an unusual overnight change of nearly $10 billion in the bank's balances at the end of 2021 prompted some economists to speculate it may be preparing to transfer funds to the Treasury. read more

The EGM announcement was made in the Dunya newspaper.

Register now for FREE unlimited access to Reuters.com

Ankara has ramped up fiscal support for the economy amid turmoil following a slide in the lira's value and soaring inflation at the end of last year. read more

Accounts published by the central bank show an adjustment of about 124 billion lira ($9.37 billion) in its valuation account, a component of the central bank's balance sheet, between Dec. 30 and Dec. 31. The account ended the year at 54 billion lira.

Another account called "other items", which includes the bank's profits, was meanwhile adjusted by around 130 billion lira ($9.78 billion), to stand at 60.2 billion lira on Dec. 31.

Economists and bankers said the changes could allow the central bank to record a profit in 2021 despite the currency crisis toward year-end. Any profits are typically transferred in April to the Treasury, the central bank's main shareholder.

The valuation account contains unrealised gains and losses arising from the revaluation of foreign currencies, gold and other assets and liabilities, based on price changes of the lira and gold on international markets.

Contrary to usual practice, the central bank transferred funds to state coffers in January 2019 and 2020 after extraordinary general meetings, but it did not do so last year.

The lira plunged 44% against the dollar in 2021, by far the worst performer in emerging markets, stoking annual inflation to 36% in December, the highest level under the leadership of President Tayyip Erdogan.

Last month, Erdogan unveiled a scheme to encourage savers to convert forex deposits to lira, under which the state compensates depositors for losses in value due to lira depreciation.

Register now for FREE unlimited access to Reuters.com
Reporting by Nevzat Devranoglu Writing by Daren Butler Editing by

Our Standards: The Thomson Reuters Trust Principles.