NBU cuts rates 100bp to 13.5% on falling inflation
7 minutes ago
Turkey’s current account deficit expanded by 29% y/y to $2.53bn in February, the central bank announced on April 11. This corresponded with the market's expectation.
The current account deficit, a weak spot when it comes to the Turkish economy, stood at $32.6bn in 2016, compared to the previous year’s $32.1bn. The government’s forecast for 2017 is $32bn, or 4.2% of GDP.
Exports declined by 2% y/y to $12.7bn while imports were up 2% y/y to $15.2bn, leading to a foreign trade deficit of $2.27bn in the second month of 2017, a 28% y/y rise from a year earlier.
Tourism revenues, which traditionally help the country plug its large current account deficit, were down 12% y/y to $863mn, financing 34% of the current account shortfall in February.
On the financing side, net foreign direct investment (FDI) inflows dropped 5% y/y to $457mn, while net portfolio inflows declined by a sharper 67% y/y to $409mn in February. There was an inflow of $331mn into Turkish equities in the month while the domestic government debt securities market saw an inflow of $179mn. The central bank also reported an outflow of $84mn through net errors and omissions.
Following the release of the latest data, the Turkish lira was trading at 3.7258 per dollar, down 0.10% d/d. The main stock exchange index, the BIST-100, was down 0.31% to 90,958.
| Turkey's Balance of Payments | ||||||
| ($ mn) | 2015 | 2016 | y/y | Jan-Feb/16 | Jan-Feb/17 | y/y |
| CURRENT ACCOUNT | -32,118 | -32,626 | 2% | -4,166 | -5,287 | 27% |
| Goods, Services and Primary Income | -33,548 | -34,415 | 3% | -4,665 | -5,605 | 20% |
| Goods and Services | -23,906 | -25,424 | 6% | -3,503 | -4,497 | 28% |
| Foreign trade balance | -48,114 | -40,843 | -15% | -4,632 | -5,614 | 21% |
| Exports | 151,970 | 150,178 | -1% | 23,009 | 24,576 | 7% |
| Imports | 200,084 | 191,021 | -5% | 27,641 | 30,190 | 9% |
| CAPITAL ACCOUNT | -21 | 23 | - | 15 | -16 | - |
| FINANCIAL ACCOUNT | -21,941 | -21,335 | -3% | -2,918 | -6,125 | 110% |
| Net FDI | -12,455 | -9,148 | -27% | -1,063 | -631 | -41% |
| Net acquisition of financial assets | 5,095 | 3,155 | -38% | 548 | 428 | -22% |
| Net incurrence of liabilities | 17,550 | 12,303 | -30% | 1,611 | 1,059 | -34% |
| Net Portfolio Investment | 15,719 | -6,292 | - | -70 | -2,482 | 3446% |
| Net acquisition of financial assets | 6,129 | 1,511 | -75% | 384 | -474 | - |
| Net incurrence of liabilities | -9,590 | 7,803 | - | 454 | 2,008 | 342% |
| Net errors and omissions | 10,198 | 11,268 | 10% | 1,233 | -822 | - |
| Source: tcmb | ||||||
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