İstanbul Stock office gets rich through exchange rates

The İstanbul Stock Exchange's balance sheets show that it increased its foreign deposits in recent years by buying foreign currencies with low prices and then changing them at high prices
Thursday, 23 August 2018 21:31

The İstanbul Stock Exchange (BİST) gained at least $393,5 million in the last three years through changing foreign exchange deposits.

As the dollarization stands as one of the biggest problems of Turkey, official institutions like the BİST do not take any step to reverse the trend despite Turkish President Recep Tayyip Erdoğan's and his government's hypocritical call for buying Turkish Lira.

Erdoğan called on Turks in earlier August to support their struggling currency, the lira, by exchanging any foreign money, saying Turkey faces an economic war. "If you have dollars, euros or gold under your pillow, go to banks to exchange them for the Turkish lira. It is a national fight," he said in comments broadcast on national television.

Although the BİST announced to change its entire cash assets into the Turkish Lira following the call of Erdoğan in December 2016, the data show that the institution's foreign exchange deposits have continued to rise until today.
According to the BİST's balance sheet in 2017, it has 641,44 million US dollar and 434,62 million Euro in its foreign currency deposits, showing that it increased its Euro deposits as 171,60 million Euro and as 16 thousand dollars in comparison to 2016.

The balance sheet shows that the US dollar was valued at 3,77 TL while the Euro at 4,5 TL in 2017, and 3,5 TL and 3,7 TL respectively in 2016. Therefore, the BİST's total 'ex-interest' income reached up to $188,14 million through foreign exchanges in 2017.

Evaluating the BİST's balance sheets in recent years, analysts indicate to the increases in the Turkish stock exchange's foreign deposits, arguing that it bought foreign currencies with low prices and then changed them with high prices. "If any measure is to be taken against the dollarization, the government offices primarily should take a step. The BİST announced last year that it had changed its deposits to the Turkish Lira. If so, where did all this dollar come from?" an analyst asks.

When the US dollar hit 4,84 against the TL, the BİST declared that it had changed all of its foreign currency deposits into the lira except for short-term needs without revealing any figure.

The BİST's 2017 balance sheet shows that its short-term Turkish Lira loans are around 3 billion TL ($520 million with the exchange rate of 6 TL) as its dollar-based short-term loans are 347,66 million with the exchange rate of 3,77 TL, showing that all the dollar deposits reached up to 293,78 million. However, as this money was changed with the rate of 4,84 TL, it becomes $232 million considering that the amount of US dollar deposits did not increase since late 2017. In other words, the BİST's annual income reached up to 51,5 million dollars while its three-year income reached at least to 157,38 million.

Considering that the BİST's Euro deposits did not increase in the same period, its annual income hit $46,9 million as its three-year income reached at least 397 million. The figures of BİST's deposits show that its debt is largely in foreign currency.

The Turkish Lira has witnessed a freefall against the US dollar and the Euro particularly following the escalated tension between Ankara and Washington over some disputes including the house arrest of American pastor Andrew Brunson. The Turkish Lira has lost nearly 40 percent of its value against the dollar this year.