Turkish bank begins transactions in Chinese yuan

Turkey’s state-run Vakifbank has begun accepting payments in Chinese yuan, Vakifbank CEO Abdi Serdar Ustunsalih said.

The move follows a swap agreement signed by the central banks of Turkey and China last year aimed at strengthening financial cooperation between the two countries.

China is Turkey’s second-largest source of imports after Russia, with trade between the two countries worth $21 billion in 2019, Ustunsalih told state-run Anadolu news agency on Wednesday.

A number of Turkish companies began using yuan to pay for imports for the first time in June. But the extension of the scheme to Vakifbank is now likely to make the facility more widely accessible.

The Turkish central bank has increasingly sought access to swap agreements in recent years after depleting its own foreign currency reserves in an effort to defend the lira.

In May, Qatar tripled the value of its exchange agreement with Turkey to $15 billion.

Similar deals are reported to have been sought with other countries, including the United States, but without success.

Meanwhile, the value of the lira has continued to fall, reaching a record low of 7.72 per dollar on Thursday.