The move secures much-needed funding as the country of 82 million burns through its reserves and faces a widening fiscal deficit.
The move amended the original limit of $5 billion on the two countries' initial swap agreement in 2018, raising it to $15 billion.
The move amended the original limit of $5 billion on the two countries' initial swap agreement in 2018, raising it to $15 billion. The Turkish central bank has drawn down millions of dollars from its foreign currency reserves in recent months to buyand prop it up against the dollar. The expanded swap line with Qatar — which in recent years has strengthened its political and economic relationship with Ankara — enables Turkey's central bank to provide its domestic banks with the foreign liquidity they need without using its own foreign reserves.
"From a geopolitical perspective, the U.S. is staunchly opposed to the conclusion of such deals, which aim at ditching the U.S. dollar," Demarais remarked, noting a key function of such swap deals, which are often used to circumvent U.S. sanctions and render the dollar irrelevant. "U.S.-Turkey tensions will only rise further, which represents the main threat to the Turkish economy.
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