'Where is the $128 billion?': Turkey's questions about forex reserves rattle Erdogan

In Turkey, the question “Where is the $128 billion?” turned into a political slogan by the nation’s largest political party and is now inscribed on protesters has rocked the government of President Recep Tayyip Erdogan. As per Bloomberg report, The Republican People’s Party, known by its Turkish abbreviation CHP, accused Erdogan’s government of blowing through the $128 billion in foreign exchange reserves over the course of two years, which is the time when the Turkish President’s son-in-law Berat Albayrak was treasury and finance minister. CHP said that the billions of dollars blew in Erdogan’s failed attempt to prop up Turkish currency, the lira.

As it was evident that CHP’s campaign against the ruling government has fairly influenced the nation, Erdogan reportedly launched a counterattack on April 21 clarifying that the sum was actually $165 billion. In defence, the Turkish President said that those reserves could be used “again when needed.” However, the Wednesday remarks by Erdogan came weeks after he angrily denied the reports. Several senior officials of Erdogan’s government even made failed attempts to erase the slogan altogether by their dismissals.

Albayrak’s successor suggest publishing transactions

Weeks later, Albayrak’s successor, Lufti Elvan said in a televised interview on Monday that it would be “beneficial” for the central bank to publish the data on foreign exchange transactions in 2019 and 2020. This also reportedly indicates that Erdogan is presently vulnerable to political pressure mounting with the same slogan written on billboards in Istanbul.

Turkey is among a handful of nations that still uses reserves to shore up its own currency but reportedly the scale of the sale was saddening as the currency’s net international reserves fell by over 75% since the beginning of the last year to just $10 billion in April. At the same time, the report stated that borrowing money from banks under short-term swaps ran into tens of billions of dollars. As per Bloomberg calculations, when money borrowed from local lenders via swaps is stripped out, the net international reserves falls even below zero.

Image credits: AP