Turkey’s net international investment gap—gauging the difference between the country’s foreign assets and liabilities—contracted by another 4% m/m to $391bn by the end of July. That marks the lowest level recorded since Q4 2016, the central bank said on September 21.
The gap expanded by a sharp 25% y/y to a record high of $466bn at the end of 2017 from $373bn at end-2016 but it fell by 3% q/q to $452bn at end-Q1 and by 10% q/q to $408bn at end-Q2.
The country’s external assets rose by 2% m/m to $230bn at end-July while external liabilities fell by 2% m/m to $620bn.
Under the main liabilities group, direct investments—equity capital plus other capital—declined further by 5% m/m to $142bn at the end of July, while portfolio investments fell by 4% m/m to $150bn.
Non-residents’ equity holdings decreased by 8% m/m to $33bn, while their holdings of government domestic debt securities fell by 11% to $20bn, mainly due to the severe depreciation in the Turkish lira. Foreigners’ holdings of the Turkish government’s eurobonds slightly rose to $46.5bn at end-July from $46.4bn at end-June.
Foreign lenders’ loan stock slightly declined to $228.6bn at end-July from $228.7bn a month ago.
Turkey is heavily dependent on external borrowing due to its chronic current account deficit. Debt-financed consumption has been the prime feature of the country’s remarkable economic growth achieved during much of the past decade.
Turkey’s outstanding private sector long-term foreign loans very slightly edged down to $221.62bn as of end-July from $221.68bn at end-June, central bank data showed on September 19.
Net portfolio outflows from Turkey amounted to $2.68bn as of September 14, according to the latest data from the central bank.
Turkish residents’ total FX deposits with local lenders edged up by 1% w/w to $153bn as of September 14 from September 7's $151bn, which marked the lowest level since March 2017, according to central bank data released on September 20.
Total gross international reserves, including gold and FX reserves, edged down by 1% w/w to $87.6bn as of September 14, the lowest level recorded since January 2012, from $88.8bn as of September 7, according to the latest data from the central bank.
Turkey’s gross external debt stock rose by 3% q/q and 12% y/y to reach $467bn by the end of March, the Treasury said on June 29.
The net short FX position of the non-financial firms slightly declined by 1% m/m to $216bn at end-June, according to the latest data from the central bank.