So BdL Governor says $15bn/$26bn of “Other Assets” on its b/s is hidden $ loans to MoF, despite misleading footnote on b/s.An accounting gimmick/fraud to mask losses of its $ reserves. That leaves $11bn of other losses.What other accounting gimmicks is it using? Audit BdL.
How’s this relevant to your life? It means the country has fewer $ than BdL admits to, meaning fewer $ to pay for imports and fewer $ to pay peoples’ $ deposits. Every $ BdL has is money that belongs to depositors. We need to know exactly amounts to know the size of the problem.
So when he says deposits r safe on the one hand,& then admits to flagrant accounting gimmick that has only 1 purpose(to hide the scale of the problem)& says ur free to withdraw ur $ in Lira & take a 40% loss,it confirms the plan is to push cost of the crisis onto small depositors
And for those technically inclined, the resulting currency mismatch on BdLs balance sheet (i.e. it owes way more $ than it has or can generate) has big implications for the future value of the Lira as @AndyKhalil1 explains here.
