Türkiye’s current account posted a surplus of $1.88 billion in October 2024 for five consecutive months for the first time in nearly five years, the Central Bank of the Republic of Türkiye (CBRT) reported on Thursday.
According to the balance of payments data released by the CBRT, direct investments saw a net outflow of $204 million in October, while portfolio investments recorded a net inflow of $587 million.
Detailed analysis shows that non-residents made a net sale of $642 million in the equity market and a net purchase of $978 million in the government domestic debt securities market.
In simple terms, the balance of payments is a statistical report that systematically records economic transactions between a country’s residents and non-residents over a specific period.
Key indicators from balance of payments October 2024
- Regarding overseas bond issuances, banks, the central government, and other sectors recorded net borrowings of $1.807 billion, $1.658 billion, and $1.622 billion, respectively.
- Under the category of other investments, domestic banks’ foreign correspondent bank deposits decreased by $97 million.
- Non-residents’ deposits in domestic banks showed a net increase of $1.108 billion, comprising a $295 million decrease in foreign currency deposits and a $1.403 billion increase in Turkish lira deposits.
- In terms of foreign-sourced loans, banks, the central government, and other sectors recorded net utilizations of $3.877 billion, $45 million, and $312 million, respectively.
- Official reserves recorded a net increase of $4.861 billion during the month.
‘1% target’
Vice President Cevdet Yilmaz discussed current account statistics, stating that the annualized current account deficit decreased to $7.7 billion as of October. Highlighting that the services balance supported the improvement in the trade deficit, Yilmaz remarked the trade deficit amounted to $32.5 billion in the first 10 months of 2024, underlining the following insights from the data:
- Surplus in the services balance increased by $3.4 billion as of October 2024
- Annualized service revenues reached $112.5 billion during this period
- Portfolio inflows totaled $5.5 billion
Yilmaz emphasized that they are implementing the economic program effectively, and the positive results observed in macroeconomic indicators demonstrate the program’s efficiency.
Yilmaz added that he expects Türkiye’s current account deficit to gross domestic product (GDP) ratio to reach around 1% by the end of 2024, saying “The trends in demand components for growth and the decline in the trade deficit confirm that demand-driven pressures on inflation have eased.”
