Turkey’s central bank reported a loss of 700.4 billion Turkish lira ($18.4 billion) for 2024, according to its balance sheet published in the Official Gazette on Tuesday, revealing ongoing strain on the country’s financial system amid a deepening economic crisis, the Dünya daily reported.
The loss follows an even steeper shortfall of 818.2 billion lira ($25 billion at the time) in 2023. In contrast, the bank had posted profits of 57.5 billion lira in 2021 and 72 billion lira in 2022.
The back-to-back losses are largely attributed to the central bank’s controversial foreign exchange-protected deposit scheme, introduced in late 2021 to stabilize the lira amid a sharp currency depreciation. The program, which was terminated earlier this year, guaranteed lira deposit holders compensation for losses against foreign exchange fluctuations, a policy that has placed a heavy burden on the public purse.
As a result, the central bank has refrained from transferring profits to the Treasury for the second year in a row.
The bank’s 93rd fiscal report also showed a significant increase in its total assets, rising from 6.92 trillion lira in 2023 to 8.59 trillion lira by the end of 2024.
The central bank will convene its general assembly on April 30 in Ankara to discuss the 2024 results.
The troubling financial results come amid growing concern over the Turkish economy, which has been battered by soaring inflation, a weakening currency and diminished investor confidence.
Turkey has experienced double-digit inflation since 2019, making life increasingly more expensive for millions of people. Its annual inflation slowed for a 10th straight month in March, falling to 38.1 percent, according to official data.
However, official inflation figures are disputed by independent economists from the Inflation Research Group (ENAG), who estimate that consumer prices rose 75.2 percent in March.
Meanwhile, a recent political crisis in the country sparked by the arrest of İstanbul Mayor Ekrem İmamoğlu last month in an investigation widely seen as politically motivated has rattled markets, injecting more uncertainty into the country’s economic and financial outlook.
Instead of letting the Turkish lira’s exchange rate adjust, the central bank has decided to stabilize the currency by selling a significant amount of foreign exchange reserves.
According to Turkish media reports, the losses of Turkey’s central bank following the arrest of İmamoğlu on charges of corruption could exceed $45 billion.
