Our country posted a very successful and strong economic activity performance during the pandemic compared to other countries. As you know, economic activity in many countries declined in that period, and growth in many economies remained close to zero. However, the Turkish economy, which normalized rapidly in the succeeding period, ranked among the top economies in terms of high growth rates. Accordingly, our economy grew by 11% in 2021, posting a very strong growth performance compared to other countries. The conflict between Russia and Ukraine that started in the first quarter of 2022 aggravated the effects of ongoing negative supply shocks and increased the uncertainties. Nevertheless, domestic economic activity remained strong in a sustainable and uninterrupted framework despite negative supply shocks. Accordingly, the annual growth rate stood at 7.3% in the first quarter of 2022. We expect that growth will also be close to this rate in the second quarter. Net exports and machinery-equipment investments have a very remarkable share in this strong growth. On the expenditures side, net exports have contributed positively to growth for the last five consecutive quarters. Machinery-equipment investments have  1/5  BIS - Central bankers' speeches  also made an uninterrupted positive contribution to growth in the post-pandemic period. On the production side, the services and industrial sectors continued to contribute to growth. We see that machinery-equipment investments continue in a sound and sustainable framework. Investments that support productive capacity, particularly machineryequipment investments that drive industrial output, point to a stable and strong growth.
But even this would probably cost quite a lot in terms of money and prestige (for example, it is easy to imagine the management being replaced), so, in general, this is probably not an alternative that a bank would wish to consider. Naturally, one way of reducing the risk would be, quite simply, to decrease lending in dollars and thus also the need for borrowing in dollars. In such a case, customers would have to be referred to other banks. Of course, at least major customers generally also have contact with US banks, which never encounter acute liquidity shortages, as they can turn directly to the Federal Reserve in the event of a crisis. So they have access to a lender of last resort which can create dollars. This is exactly what the Swedish banks lack. Now, naturally it hurts for a bank to refer good customers to a competitor, but if you don’t have any dollars, then you don’t have any dollars. It’s all a question of what risks the bank is willing to take. Another way of minimising the risk is for the Riksbank to maintain a foreign currency reserve that the banks can have access to in a crisis, as it does at present. The Riksbank has several reasons for maintaining a reserve in foreign currency, but one important argument for its current size is precisely the need to be ready to lend to the banks6. The Riksbank’s foreign exchange reserve is currently equivalent to about SEK 300 billion.