Dareen Cone 
Saudi Arabia has pledged to deposit a whopping $5 billion into Turkiye’s central bank through the Saudi Fund for Development, according to an announcement released on Monday. This move reflects the kingdom’s dedication to aiding Turkiye to strengthen its economy and genuinely reflects its commitment to this cause.
Turkiye and Saudi Arabia Have a Turbulent Relationship
Turkiye is currently battling a tumultuous economy, crippled by years of high inflation and an onslaught of earthquakes that have taken the lives of more than 46,000 people. Unfortunately, this economic crisis shows little sign of abating as inflation sits at a stagnant rate above 55%, causing its currency to teeter near record lows versus the dollar despite Turkish President Recep Tayyip Erdogan’s policy interventions.
Rising global energy prices, the Covid-19 pandemic, and Turkiye’s ever-increasing current account deficit have put its economy in a precarious position – leaving many of its 85 million citizens struggling to purchase essential items. Notably, Saudi Arabia’s financial aid demonstrates an improvement in their relationship after ties were almost broken due to the death of journalist Jamal Khashoggi at the hands of Saudi agents inside Istanbul’s consulate. This move may indicate a potential shift towards reconciliation between these two powerful players within the Muslim world.
Throughout the years, both countries have taken multiple clandestine actions to blacklist each other’s products and flights or censor their respective media outlets. However, in 2022 the leaders of Turkiye and Saudi Arabia paid reciprocal visits to one another’s nations with the intention of trading and investing; as a result, Erdogan changed his attitude completely—moving towards friendship while securing much-needed economic assistance for his struggling economy.
This Move by Saudi Arabia May be Based on a Political Agenda
For some, Riyadh’s move appears to be related to the upcoming Turkish presidential election on May 14. Timothy Ash of BlueBay Asset Management commented in an email note: “Guess we now know whom MBS wants to win the Turkish election.” He went on further and observed that what was interesting was that compared with other distressed credits such as Pakistan, Egypt, Tunisia, or Bahrain; Saudi Arabia has provided Turkiye with a loan without any strings attached. This suggests that there could be more than meets the eye behind this unexpected gesture from Riyadh.
