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Türkiye’s 5-year credit default swaps (CDS) have dropped to 232 basis points, marking their lowest level since May 2018, data from S&P Global Market Intelligence showed on Tuesday.
The cost of insuring Ankara’s government debt using CDS has fallen nearly 40 basis points in the last three months.
The rate reached a peak in 2022 but has regressed notably following the shift to more conventional economic policies in the aftermath of the 2023 elections.
“While the strengthened financial stability, thanks to the program we implemented, was effective in this improvement, our external financing costs have also decreased significantly,” Treasury and Finance Minister Mehmet Şimşek said in a post on X, commenting on the development.
The drop in the CDS, a form of insurance for bondholders, came amid the latest growth data, which showed on Monday that Türkiye has been growing uninterruptedly for the last 21 quarters, while the country has also seen a decline in inflation.
The Turkish central bank’s net reserves are also estimated to have increased by around $2.5 billion last week due to rising gold prices, according to bankers on Tuesday.
Calculations by five bankers showed that net reserves rose to $72 billion in the week ending Nov. 28, with net reserves excluding swaps also rising some $2.5 billion to $57.5 billion.
Bankers estimated that the change in net reserves was entirely due to the gold price change.
Total reserves increased by $2.5 billion, bringing them to over $183 billion, the bankers said.
Their calculations were based on the central bank’s preliminary data, with official data to be released on Thursday.
