According to SFD, the $5 billion loan is a testament to the close cooperation and historical relationship between the two countries, as well as Saudi Arabia's commitment to supporting Turkey's efforts to strengthen its economy, promote social growth and sustainable development.
"Through this donation, Saudi Arabia expresses its strong support for the Turkish people and its confidence in Ankara's economic future," the SFD statement added.
Saudi Arabia's Finance Minister Mohammed Bin Abdullah Al-Jadaan confirmed the money will be transferred in December to the Turkish Central Bank.
SFD Chairman Ahmed Aqeel Al-Khateeb (left) signs the agreement with Governor of the Central Bank of Türkiye Sahap Kavcioglu. Photo: SFD
The cash injection deal was signed after Türkiye suffered an estimated $8.5 billion in damage from a devastating earthquake in the south, amid a difficult economic situation.
Türkiye's foreign exchange reserves have fallen sharply in recent years due to market interventions and after a currency crisis in December 2021. The lira lost about 30% of its value against the dollar last year and about 44% in 2021.
Türkiye's inflation is currently above 55%. According to CNBC, many of the country's 85 million people can barely afford basic goods after being hit by the Covid-19 pandemic, rising energy prices and a trade deficit.
Ankara and Riyadh have recently been trying to mend ties that were damaged by the murder of journalist Jamal Khashoggi at the Saudi Arabian Consulate in Istanbul in 2018.
In 2022, the two countries' leaders made a series of diplomatic visits and pledged to boost trade and investment, as Turkish President Tayyip Erdogan pursued policies that would help financially support the domestic economy.
Some observers say Riyadh's cash injection has a clear political purpose, as Türkiye holds presidential elections in May.
“Crown Prince Mohammed bin Salman may want Erdogan to stay in power,” said Timothy Ash, a market analyst at BlueBay Asset Management in London. “It is worth noting that Saudi Arabia has lent Turkey $5 billion without any strings attached, while other loans to Pakistan, Egypt, Tunisia, Bahrain all came with macro policy strings attached.”
The Central Bank of Türkiye and the SFD have not yet responded to requests for comment on this information.
According to VnExpress
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