He worked for HazIne, not to fight inflation.

in the coin It was announced that the Central Bank (CBRT), which melted billions of dollars of reserves to control the fluctuation and transferred the necessary funds allocated to the Treasury to be used in difficult times, made a profit of TL 72 billion 22 million in 2022. This benefit was obtained by keeping the loss of 328.5 billion lira on the balance sheet, which was caused by the increase in exchange rates last year. The Central Bank, which made reserves fall to negative 40.2 billion dollars with the sale of foreign currency, and that citizens pay a high price with the increase in inflation up to 85 percent with interest reduction, will distribute profits in the Ordinary General Assembly to be held today. CBRT, for your benefit; will transfer 62.3 billion lira to the Ministry of Finance under the name of taxes, dividends and reserves. With the payment of 30 billion lire to AFAD, the Center will have transferred 92.3 billion lire to the state coffers before the elections. Bilkent University faculty member, former CBRT Chief Economist Professor Dr. Hakan Kara explained that accounting flexibility is used to ensure a continuous transfer of resources to the Treasury. Saying that the CBRT generally makes a profit in periods of high inflation, Kara noted that the TL depreciates in periods of high inflation, explaining that the valuation in foreign exchange assets is converted to profit through sales.

REDUCES THE POWER OF CONTROL

“Therefore, it is not good for the CBRT to make a profit when you look at it this way,” Prof. Dr. Kara said, “In other words, even though the Central Bank’s foreign currency debt is high, it can make a profit with the exchange rate and transfer a large amount to the Treasury. This situation reduces the power of the Central Bank to control inflation.

CBRT writes profit when exchange rate rises due to accounting

Former CBRT Chief Economist Prof. Dr. According to information provided by Hakan Kara, a central bank with a negative net foreign exchange position should not benefit from foreign exchange sales. However, when the exchange rate rises due to accounting in the CBRT, the Bank writes a profit in each situation. The part of the loss that arises from the net open position goes to the valuation account. The Central Bank suffered a foreign exchange loss of 328.5 billion lira last year due to rising exchange rates. Since this loss has not yet occurred, it was recorded in the asset valuation account of the balance sheet and did not affect the Bank’s profit.