The Turkish central bank’s net forex reserves dropped into negative territory for the first time since 2002, standing at $-151.3 million on May 19, official data showed on Thursday, as it sought to counter forex demand ahead of Sunday’s runoff vote.

President Tayyip Erdogan led rival Kemal Kilicdaroglu comfortably in the presidential vote on May 14 but he fell just shy of the 50 per cent needed to win outright. The outcome will be decided in a May 28 runoff.

Forex demand in Turkey surged to record levels ahead of May 14 on companies’ and individuals’ expectations that the lira, which lost 44 per cent in 2021 and 30 per cent in 2022, will plunge after the vote.

The central bank’s forex reserves have sagged in recent years due to costly market interventions and other efforts to cool forex demand.

The bank’s net reserves dropped by $2.48 billion in the week to May 19, to their lowest level since February 2002. They have dropped $27.7 billion since the end of 2022.

The exchange rate used by Reuters on Thursday was 19.7607. The net forex reserves are pushed deeper into negative territory once outstanding swaps, which stood at $33.50 billion on Wednesday, are deducted.

In the first five weeks of 2002, net reserves were in negative territory, according to official data that goes back to the beginning of that year.

Note: The figures are released every week on the central bank balance sheet as per a letter of intent with the International Monetary Fund dated 18 January 2002. The figures are released in Turkish liras and are converted by Reuters to US dollars using the central bank’s official exchange rate from the previous work day.