The Saudi Fund for Development’s Chairman of the Board of Directors, Ahmed bin Aqeel Al-Khateeb, signed on Monday a $ 5 billion deposit agreement with the Central Bank of Türkiye.
According to the Saudi Press Agency (SPA), the agreement is in accordance with the directives of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and Crown Prince and Prime Minister Prince Muhammad bin Salman Al Saud.
According to a statement, the agreement was signed by Dr. Shihab Kavji Oglu, Governor of the Central Bank of Türkiye.
While the statement did not specify the term of the deposit or the expected date of the deposit, it did state that the agreement will help to strengthen the Turkish economy by addressing economic issues in various sectors.
Read more: Türkiye’s net reserves dropped $7 bn since the quake
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Data show a significant outflow of foreign currency from Türkiye. According to Bloomberg Economics, the Turkish Central Bank spent up to $108 billion last year to keep the lira relatively stable. Despite this, the lira remained the emerging market currency with the second worst performance.
According to data from the Turish Central Bank, net foreign reserves fell by about $1.4 billion to $20.2 billion in the week ending February 24.
The Central Bank of Türkiye sees maintaining the lira’s stability as critical to containing inflation, which is expected to exceed 85% by the end of 2022.
In November, Reuters reported citing a Saudi Ministry of Finance spokesperson that the Kingdom and Türkiye are discussing Riyadh placing a $5 billion deposit at the Turkish central bank.
In February, Saudi provided aid and launched an air bridge to assist those affected by the earthquake in Türkiye and Syria, and had signed project contracts worth more than 183 million Saudi riyals ($48.8 million) for the benefit of those affected by the earthquake in both countries.
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