Turkish private companies’ long-term external debt rises to $167.5bn at end-2014

By bne IntelliNews February 13, 2015

Turkish private sector’s long-term foreign debt rose from a revised $163.4bn at end-Q3 to $167.5bn at end-2014, data of the Central Bank showed on February 13.

The private sector’s long-term debt stood at $165.7bn at end-Q2 and $155.9bn at end-2013.

Financial institutions’ long-term debt increased from $79.6bn at end-September to $83.3bn at the end of December while bank’s long-term foreign debt rose from $62.2bn to $66.2bn, according to the Central Bank data. Non-financial firms’ long-term foreign debt stood at rose $84.2bn at end-Q4, rising from $83.8bn at end-Q3.

Turkish private sector’s short-term foreign debt, on the other hand, decreased slightly from $44.51bn at end-Q3 to $44.48bn at end-December, the Central Bank said. Financial institutions’ short-term debt declined from $41.8bn at end-September to $41.7bn at end-December while non-financial companies’ debt increased from $2.71bn to $2.76bn.

Turkey’s short-term external debt stock rose from $134.2bn at end-October to $138.7bn at end-November, the Central Bank said on January 16. Short-term external debt stock on a remaining maturity basis -based on the external debt maturing within one year or less regardless of the original maturity- was calculated at $173bn at the end of November, with public sector accounting for 13.9%, and private sector accounting for 85.3% in total stock.

In a presentation to the cabinet on November 24, governor of the Central Bank, Erdem Basci recommended local banks to extend the maturity of their external borrowing.

Standard & Poor's (S&P) said in November in a report that Turkish banks remain vulnerable to a potential downturn in debt and capital markets abroad because they have a large amount of debt coming to maturity during the following 12 months.

In September again, another rating agency Fitch commented that weaker emerging market sovereigns would be most exposed to a highly negative interest rate 'shock' scenario where US interest rates rise more rapidly and higher than Fitch’s base case, in which global growth and financial markets are not fundamentally destabilized by a tightening of US monetary policy. The most exposed would be weaker emerging markets such as those with large external financing needs, low foreign reserves, high levels of leverage, vulnerable debt structures, weak policy frameworks or political fragilities, and countries with these characteristics include Turkey, Fitch said.

 

Turkish Private Sector's External Debt ($ bn)

 

2011

2012

2013

2014-Q1

2014-Q2

2014-Q3

2014-Q4

Long-term

126.8

139.7

155.9

159.0

165.7

163.4

167.5

       Financial

47.1

56.0

71.8

73.5

79.5

79.6

83.3

                     Banks

34.9

41.8

54.8

56.0

60.6

62.2

66.2

       Non-Financial

79.7

83.6

84.2

85.5

86.2

83.8

84.2

Short-term

24.9

30.6

41.5

41.6

44.7

44.5

44.5

       Financial

23.5

28.1

38.8

38.6

41.9

41.8

41.7

                     Banks

22.2

26.3

36.4

36.7

39.8

39.9

39.6

       Non-Financial

1.4

2.5

2.6

3.0

2.8

2.7

2.8

source: tcmb

 

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