Gesture of ‘brotherliness’: Saudi deposited $5bn in Turkiye central bank

In further signs of improving ties between Saudi Arabia and Turkiye, Riyadh announced yesterday that it has deposited $5 billion into the Turkish central bank. The deposit is likely to be used to help Turkiye strengthen its currency, the lira, after last month’s massive earthquakes.

“In an implementation of the directives from the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and His Royal Highness Prince Mohammed bin Salman Al Saud, Crown Prince and Prime Minister, Saudi Minister of Tourism and Chairman of the Saudi Fund for Development (SFD) Board of Directors, Ahmed Aqeel Al-Khateeb, signed an agreement with the Governor of the Central Bank of the Republic of Turkey, Şahap Kavcıoğlu, to make a significant $5 billion deposit into the Central Bank of Turkey,” Saudi’s official press agency, SPA, reported yesterday.

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“This deposit is a testament to the close cooperation and historical ties that exist between the Kingdom of Saudi Arabia and the Republic of Turkey and its brotherly people,” SPA added.

The Saudi deposit follows joint efforts by Ankara and Riyadh to mend ties that were ruptured after the murder of Saudi journalist  Jamal Khashoggi in 2018 at the kingdom’s consulate in Istanbul. Turkiye also backed Qatar in a three-and-a-half year long boycott by Saudi Arabia, Bahrain, Egypt and the United Arab Emirates.

Saudi Crown Prince Mohammed Bin Salman’s official visit to Ankara in June marked another major step in repairing relations. The diplomatic spat with the Gulf states affected Turkiye’s economic well-being, with the lira losing about half its value in 2021.

No details were given on how the cash would be used or if the kingdom could call for the sum to be returned. However, it’s thought that such deposits can help firm up exchange rates for a nation’s currency against other currencies internationally.

Turkiye’s state-run Anadolu news agency praised Saudi’s action saying it reflected the kingdom’s “strong support for the Turkish people and its confidence in the future of the Turkish economy.”

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