Ankara: Trkiye's five-year credit default swap (CDS) fell to 233 basis points, marking its lowest level since May 2018, as a result of the economic administration's strategic policies to combat inflation.

According to Anadolu Agency, the country's economic growth persisted for 21 consecutive quarters in the third quarter, while annual inflation maintained a downward trend, as demonstrated by recent data. The reduction in interest rates and the central bank's total reserves reaching a record high of $198.4 billion in October helped to boost risk appetite.

The balance of Currency-Protected Turkish Lira Deposits and Participation Accounts continued to decline, reaching 22.4 billion Turkish lira ($527.7 million), following a decrease of 30.3 billion Turkish lira ($713.8 million) in the week of November 21. This decline, along with diminished physical gold demand, contributed to the CDS's drop to its lowest level since 2018.

Simultaneously, Trkiye's current account balance recorded a surplus of $1.1 billion in September, continuing its positive streak for the third consecutive month after achieving surpluses of $1.7 billion in July and $5.4 billion in August. The Turkish Central Bank (TCMB) implemented changes to its reserve requirement regulations, deciding not to extend the temporary 0% reserve requirement for increases in long-term foreign currency liabilities sourced directly from abroad beyond the end of the year.

The central bank also removed the differences in reserve requirement ratios between foreign currency and gold deposit accounts and lowered the reserve requirement ratios for long-term foreign currency liabilities outside of deposits. Additionally, liabilities of finance firms to domestic banks, which were included in liabilities subjected to reserve requirements in 2022, were excluded from this scheme once more. The credit growth restriction period was also extended by one year.