Page 11 - TURKRptFeb22

Meanwhile, the government is seizing 25% of export revenues. Turkey’s trade balance is always in deficit and its external liabilities are heavy. So, intermediary goods importers are facing difficulties in finding FX. Another tightening cycle is working through here.
Despite the ‘switching off’ of much industrial production, saving on energy bills, the trade deficit came in at a record high of $10.4bn in January.
FX derived from exporters is burnt to face FX demand and keep the USD/TRY stable.
● USD/TRY: Latest record - 18.8760 recorded on December 1.
Since December 20, USD/TRY has been kept below the 14-level while
the regime has again burnt wildly through the reserves.
Money is flowing on to the central bank's balance sheet from exporters, but its gross reserves remain flat.
The Erdogan regime kept USD/TRY stable at 6.80 in the summer of 2020 and then it recognised that there were no reserves left. The magical fixed rate was 5.85 in 2019.
Each of the regime’s FX rate-fixing adventures ends in tragedy when the palace is told that there are no more reserves left to burn.
Reserves currently stabilised thanks to FX coming from exporters but reserve burning is continuing.
Turkey’s 5-year credit default swaps (CDS), meanwhile, hover in the 500s.
● Balance of Payments: For August and September, the central bank released current account surpluses, if you buy it.
For November a deficit was released.
December and January will bring stronger real outflows in the trade account.
Financial flows stopped; as a result, they are stable. There is not much hot money left. The game is played out only among locals. Turks are
11 TURKEY Country Report February 2022 www.intellinews.com