Turkish Foreign Exchange Reserves (Aug/14) 75.166B (Prev. 71.022B)

The CBRT's weekly reserve stock is one of the most watched series in Turkish macro, and week-on-week builds of this size have historically mattered less for the level than for what they say about the composition of the build. The distinction the market draws is between gross reserves accumulated through genuine FX inflows, such as liraisation, swap unwinds or portfolio entry, and those flattered by revaluation or by the central bank's own domestic FX purchases funded through reserve-requirement mechanics, since only the former supports the credibility of the orthodox policy shift. Net reserves excluding swaps, and the share of the stock accounted for by gold and by the Treasury and bank FX balances parked at the CBRT, are the sub-series that have tended to drive the reaction in lira and Turkish Eurobond spreads rather than the headline gross figure. Periods of sustained gross accumulation have in the past coincided with easing pressure on the currency and a firmer carry case in TRY rates, while builds that reversed quickly were read as window dressing ahead of data or rating reviews. The follow-ons are the swap-adjusted net position, resident deposit dollarisation data, and whether the trend holds across subsequent weekly prints rather than a single week.