Ankara: Turkey has added hard currency earned by the services sector to the list that must be exchanged with the central bank, in an effort to bolster the nation’s foreign exchange reserves.
Banks must now convert 40 per cent of foreign exchange earned and repatriated by Turkish residents from providing services, such as tourism, health care and construction, according to a notice from the Central Bank of Turkey. Previously only export earnings were subject to the rule. While exporters are obliged to convert their foreign exchange earnings, repatriation of service sector earnings is still optional.
The announcement comes right after the central bank raised the percentage for export earnings to 40 per cent, from 25 per cent.
The Turkish government is eyeing policies other than raising interest rates to help it maintain foreign reserves amid inflation of more than 60 per cent. Turkey’s gross foreign exchange reserves have dropped to $67.7 billion from a peak of $87.9 billion in November, according to data released by the monetary authority.