Goldman Sachs Report: Half of the Money Leaving Money Market Funds Flowed into Foreign Currency and Gold

According to a report prepared by US-based investment bank Goldman Sachs, approximately half of the 13 billion dollars that exited money market funds in September was transferred to domestic foreign currency and gold deposits. During the same period, declines were also observed in the Central Bank's gross reserves.

Distribution of Fund Outflows

According to data in the Goldman Sachs report, a total outflow of 13 billion dollars took place from money market funds in September. It was determined that approximately half of this capital exiting the funds was directed toward domestic foreign currency and gold deposits.

Changes in Central Bank Reserves

The gross reserves of the Central Bank of the Republic of Turkey decreased by 9 billion dollars as of September 30 compared to the previous week, dropping to 173 billion dollars. Excluding the gold valuation effect, the weekly decline stood at 5 billion dollars.

Adjusted for gold valuation throughout September, the Central Bank reserves decreased by 11 billion dollars. Compared to pre-Iran war levels, the total reserve drop reached 43 billion dollars.

Movements in Deposit and Credit Markets

In the week leading up to September 25, foreign currency deposits adjusted for valuation effects increased by 1.3 billion dollars. TL deposits, on the other hand, recorded an increase of 7 billion dollars as of September 28 compared to a week prior.

Meanwhile, it was reported that declines occurred in interest rates for TL deposits, consumer loans, and commercial loans.

Foreign Investor Transactions

In the same period, foreign investors provided a capital influx of 400 million dollars into local debt instruments. In contrast, it was observed that a net outflow of 400 million dollars took place from the stock market.