The FX-denominated debts are very much on the radar of anxious markets with the crisis-addled Turkish lira (TRY) standing at 6.2719 to the dollar as of around 21:00 local time on September 19, meaning it was 65% weaker than it was one year ago, although it was roughly 2% up on the day. The Turkish government continues to push forward palliative measures to relieve the currency crunch faced by companies. According to a new government decree, Turkish companies are no longer required to count foreign-currency losses when assessing whether or not to file for bankruptcy.
The latest data underlines how European countries have the largest exposure to Turkish private companies’ outstanding long-term foreign credits. The combined exposure of European lenders rose slightly to $110.9bn at end-July from $110.8bn at end-June. UK-based lenders topped the list, although their total exposure showed a small decline to $29.5bn from $29.58bn at the end of the seventh month. Second-placed Germany’s exposure inched up to $22.2bn at end-July from $22.1bn a month previously.
US lenders’ total exposure to the Turkish private sector’s foreign loans also declined slightly. It stood at $19.82bn at end-July compared to $19.87bn at end-June, keeping the US in third position for the level of exposure. The Netherlands’ share declined very modestly to $13.82bn from $13.84bn while Bahrain’s exposure rose to $10.8bn from $10.7bn.
Of lenders, the European Bank for Reconstruction and Development (EBRD) still had the largest exposure, at $9.7bn. Next were the EU’s lending arm, the European Investment Bank (EIB), with $4.53bn, the World Bank Group’s International Finance Corporation (IFC) with $2.63bn and another World Bank entity, the International Bank of Reconstruction and Development (IBRD), with $1.95bn.
The data also showed Turkish banks’ outstanding long-term loans declined by 1% m/m to $93.8bn at end-July, with $30.4bn of that made up of bonds.
Non-financial private companies’ total outstanding loans edged up 1% m/m to $111.25bn at end-July, including $91.5bn worth of bank loans, $11.7bn worth of loans from parent companies or affiliates, $456mn in trade credits and $7.53bn in bonds.
Private creditors provided $154.1bn of the total of $221.62bn of outstanding loan stock, while $91bn came from non-resident commercial banks and $30.9bn was sourced from foreign branches or affiliates of local banks.
Short-term loans at $18.9bn
Statistics from the central bank also showed that the private sector's short-term loans volume declined by 1% m/m to $18.9bn as of end-July, including $12.7bn worth of loans received by Turkish lenders.
The IFC has the largest sole exposure when it comes to the Turkish private sector’s outstanding short-term loans. It jumped to $1.5bn at end-July from $372mn at end-June.
The UK also topped the list of countries with the highest exposure to the Turkish private sector’s short-term loans as its exposure rose to $4.03bn from $3.99bn at end-June. It was followed by the Netherlands with $3.24bn, slightly down from $3.27bn at end-June. European countries’ total exposure to the short-term loans stood at $15.43bn, slightly down from $15.5bn as of the end of June.
On a remaining maturity basis for the next one-year period, the Turkish private sector has to repay a total of $70.5bn for its loan debts, up from $69.6bn at end-June. The sector is obliged to pay $6.71bn in August and $7.71bn in September. The highest scheduled amounts to be paid are $9.39bn in October and $7.81bn in May 2019.
By the end of 2018, the Turkish private sector’s scheduled total loan debt repayments amount to $34.7bn.
Private sector long-term foreign debt moved up 9% y/y to stand at $222bn as of end-2017 from $202bn at end-2016, while the short-term debt rose by 28% y/y to $18bn as of end-2017 from $14bn a year previously.