International Reserves in Turkey

Turkey International Reserves | Economic News & Forecasts

Turkey - International Reserves

Current account deficit widens as Covid-19 extinguishes foreign demand

Turkey’s current account deficit widened notably in March to USD 4.9 billion from USD 0.1 billion in March of last year (February 2020: USD -1.2 billion). The print marked the fourth consecutive monthly shortfall and the largest deficit since May 2018. Consequently, the current account surplus narrowed on a 12-month rolling basis from USD 6.3 billion in February to USD 1.5 billion, the smallest in nearly one year.

The widening of the deficit year-on-year has been heavily influenced by the Covid-19 pandemic wreaking havoc on international trade and tourism, with much of Europe on lockdown in the month: Exports fell a steep 18.0% (February: +2.0% year-on-year), the largest contraction in over four years, while imports expanded 3.4% (February: +9.7% year-on-year). Meanwhile, the services trade surplus narrowed as well; tourism has been particularly hard hit by the pandemic, which has seen widespread travel restrictions put in place.

On the financial front, there was a net outflow of USD 7.7 billion, up from the USD 1.6 billion outflow recorded in the same month of the prior year (February 2020: USD 3.2 billion inflow). The outflow of capital was driven by foreign banks and foreign nationals limiting their exposure to Turkey and debt repayments by Turkish banks and firms. Moreover, the country’s already very low international reserve assets plunged by USD 16.6 billion in the month.

Turkey’s current account deficit widened notably in March to USD 4.9 billion from USD 0.1 billion in March of last year (February 2020: USD -1.2 billion). The print marked the fourth consecutive monthly shortfall and the largest deficit since May 2018. Consequently, the current account surplus narrowed on a 12-month rolling basis from USD 6.3 billion in February to USD 1.5 billion, the smallest in nearly one year.

The widening of the deficit year-on-year has been heavily influenced by the Covid-19 pandemic wreaking havoc on international trade and tourism, with much of Europe on lockdown in the month: Exports fell a steep 18.0% (February: +2.0% year-on-year), the largest contraction in over four years, while imports expanded 3.4% (February: +9.7% year-on-year). Meanwhile, the services trade surplus narrowed as well; tourism has been particularly hard hit by the pandemic, which has seen widespread travel restrictions put in place.

On the financial front, there was a net outflow of USD 7.7 billion, up from the USD 1.6 billion outflow recorded in the same month of the prior year (February 2020: USD 3.2 billion inflow). The outflow of capital was driven by foreign banks and foreign nationals limiting their exposure to Turkey and debt repayments by Turkish banks and firms. Moreover, the country’s already very low international reserve assets plunged by USD 16.6 billion in the month.

Turkey’s current account deficit widened notably in March to USD 4.9 billion from USD 0.1 billion in March of last year (February 2020: USD -1.2 billion). The print marked the fourth consecutive monthly shortfall and the largest deficit since May 2018. Consequently, the current account surplus narrowed on a 12-month rolling basis from USD 6.3 billion in February to USD 1.5 billion, the smallest in nearly one year.

The widening of the deficit year-on-year has been heavily influenced by the Covid-19 pandemic wreaking havoc on international trade and tourism, with much of Europe on lockdown in the month: Exports fell a steep 18.0% (February: +2.0% year-on-year), the largest contraction in over four years, while imports expanded 3.4% (February: +9.7% year-on-year). Meanwhile, the services trade surplus narrowed as well; tourism has been particularly hard hit by the pandemic, which has seen widespread travel restrictions put in place.

On the financial front, there was a net outflow of USD 7.7 billion, up from the USD 1.6 billion outflow recorded in the same month of the prior year (February 2020: USD 3.2 billion inflow). The outflow of capital was driven by foreign banks and foreign nationals limiting their exposure to Turkey and debt repayments by Turkish banks and firms. Moreover, the country’s already very low international reserve assets plunged by USD 16.6 billion in the month.

This year, Turkey is expected to remain in a current account deficit as exports take a hit due to the Covid-19 pandemic, which will also depress tourism. FocusEconomics Consensus Forecast panelists expect Turkey to record a current account deficit of 0.8% of GDP in 2020. The year after, the panel sees the current account deficit widening to 1.6% of GDP.

Turkey - International Reserves Data

2014   2015   2016   2017   2018  
International Reserves (USD)107  92.9  92.1  84.2  72.9  

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Turkey International Reserves Chart


Turkey International Reserves
Note: International reserves in months of imports.
Source: Central Bank and FocusEconomics calculations.

Turkey Facts

Value Change Date
Bond Yield12.00-0.09 %Dec 31
Exchange Rate5.95-0.85 %Jan 01

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