Turkish private companies’ long-term external debt rises to $178.2bn at end-July

By bne IntelliNews September 14, 2015

Turkish private sector’s long-term foreign debt rose from $177.2bn at end-Q2 to $178.2bn at end-July, data of the Central Bank showed on September 14. The debt stood at $167.85bn at the end of 2014.

Turkey is still heavily dependent on external borrowing due to its chronic current account deficit problem while private sector’s share in total external borrowing have been increasing in the recent years. Current global conjuncture under the threat of FED’s expected policy shift, depreciation of local currency and political uncertainties impose risks on Turkish private sector’s foreign borrowing ability although significant problems have not been felt yet or are expected in the short term at least. Fitch said on September 11 in a note named ‘Turkish banks’ external debt continues to increase’ that Turkish banks still has the largest share in foreign borrowing, and as a result still vulnerable to exchange rate fluctuations.

Financial institutions’ long-term debt increased from $94.8bn at end-Q2 to $95.9bn at end-July, according to data from the central bank. Regarding the currency composition of the total of $178.2bn debt, 61.8% consists of USD and 31.5% consists of Euro, detailed the central bank.

Data also showed that Turkish private sector’s short-term foreign debt declined from $33.8bn at the end of the second quarter to $33.1bn at end-July.

Turkish Private Sector's External Debt ($ bn)
  2010 2011 2012 2013 2014 2015-Q1 2015-Q2 2015-7
Long-term 120.0 127.0 139.8 156.0 167.8 166.5 177.2 178.2
       Financial 41.3 48.1 57.1 73.1 85.0 87.1 94.8 95.9
                     Banks 28.7 34.9 41.8 54.9 66.0 68.8 75.5 76.6
                               Loans 27.7 31.6 31.3 38.8 44.4 46.0 52.5 54.4
       Non-Financial 78.7 78.9 82.7 82.9 82.8 79.4 82.4 82.4
Short-term 19.0 24.9 30.6 41.4 44.4 39.8 33.8 33.1
       Financial 18.0 23.5 28.1 38.8 41.6 37.2 31.2 30.5
                     Banks 17.0 22.2 26.3 36.4 39.6 35.1 29.0 28.1
                             Loans 17.0 22.2 26.2 35.0 35.7 31.6 25.4 24.6
       Non-Financial 1.0 1.4 2.5 2.6 2.8 2.6 2.6 2.6
source: tcmb
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