Page 34 - TURKRptJul19

abroad at US$23.4 billion.” He added in a note: “Portfolio inflows painted a mixed picture with non-residents selling a mere US$78 million in the equity market and US$0.7 billion in the bond market while net issuance of the Treasury after heavy activity in the previous months was US$-1.4 billion. However, banks managed to issue US$0.5 billion bonds.” In his summary, Mercan said: “Overall, the correction in external deficit on the back of weak domestic demand and increased competitiveness will likely continue in the period ahead albeit at a slower pace. Outflows accelerated in April, signalling that the outlook will remain challenging. “The global backdrop of increasing market expectations of Federal Reserve rate cuts given weakening prospects for global trade and global investment can impact countries like Turkey.”
April is a period of debt servicing, meaning primary income pushes the deficit higher because of the impact of interest payments, Hilmi Yavas, an economist at Yatirim Finansman, was quoted as saying. “There is a rise of slightly less than $1 billion here compared to, for example, January and February. The rest of the dynamics are the same,” he said, adding that Turkey could post monthly surpluses in May and June with rising surpluses in the services component. The current account deficit has narrowed markedly since last year’s currency crisis wiped around 30% of the value of the Turkish lira, pushing up import prices and shrinking the trade deficit.
5.2.3 Gross intl reserves
34 TURKEY Country Report July 2019 www.intellinews.com