Central Bank
assets rise 16 percent

Loans to financial sector

double to $12.7 billion

The total assets of the Central Bank (BDL) grew to $118.3 billion at the end of 2017, rising by $15.9 billion or 16 percent compared with a year earlier, according to BDL's data.

Deposits by the financial sector surged over the same period by $13.3 billion, or 16 percent, to $97.5 billion. The banks’ deposits at BDL include a variety of items such as lira and dollar deposits, reserve requirements, and certificates of deposit (CDs).

The Central Bank’s loans to the financial sector doubled to $12.7 billion, adding $6.3 billion to total assets.

BDL’s exposure to the banking sector increased following the financial engineering operations of 2016. Some banks participated in these swap operations beyond their capacity in dollar liquidity. Last year these banks had to secure short term bridge loans from the Central Bank in order to replenish their liquidity in dollars, a source said. These banks are now offering attractive interest rates on dollar deposits in order to collect additional funds to repay the BDL bridge loans, according to the source.

The Central Bank’s securities portfolio increased by $3.4 billion, or 13 percent, to $29.3 billion. The portfolio mainly includes subscriptions to treasury bills which are covered by CDs in lira issued by BDL. The CDs are sold to local banks which prefer to lend to the government through the Central Bank.

BDL’s foreign assets grew by $1.3 billion, or three percent, to $42 billion. Gold reserves increased by 12 percent to $11.96 billion driven by the rise in the price of gold. The price of one ounce of gold rose to $1302.45 in December 2017 from $1158.24 a year earlier, according to a report by Blominvest Bank.