The Turkish central bank’s gross foreign exchange reserves declined by 0.9% w/w to $90.1bn as of July 7 from $90.2bn on June 30, data in the national lender's regular weekly bulletin showed on July 13.

Gross FX reserves saw its yearly lowest level of $84.99bn as of April 28, the worst level recorded since July 2012. Gross reserves stood at $95.7bn at end-2015 and at $92.05bn by end-2016.

The latest data also showed the central's bank's gold reserves rose by 0.86% w/w from $18.5bn as of June 30 to $18.7bn on July 7. The gold reserves stood at $14.05bn at end-2016.

Consequently, total gross international reserves, including gold and FX reserves, rose 0.86% w/w from $108.7bn as of June 30 to $108.8bn as of July 7. Gross international reserves have fallen to $106bn at the end of 2016 from $111bn at the end of 2015.

Turkey was taking steps to give its central bank the right of first refusal on domestically-produced gold, allowing it to boost reserves of the precious metal without depleting foreign currency holdings, sources told Reuters in April.

The national lender's reserves have again appeared on the radar given the Turkish lira's volatility in the beginning of 2017. The USD/TRY rate recovered to below 3.55 in April after hitting the 3.90s in January.

The Turkish lira had lost 0.04% d/d against the USD to trade at 3.5691 on July 13 while the BIST-100 was up 0.39% to 104,210 at closing prices.

Large external financing needs against comparatively low foreign exchange reserves means that the country’s vulnerability to shocks will continue to weigh on its creditworthiness, Moody’s Investors Service warned in a report published in April.

The Turkish government's capacity to support the banking system if required is on the wane, Moody's also warned on May 3. The central bank's net FX reserves of $34bn as of January were modest compared to short-term bank wholesale maturities of almost $80bn, the rating agency said.