Page 11 - TURKRptOct22

As of October 4, net lira creation via loans extended its record on an annual basis to TRY 1.54 trillion (The figure may decline if the amount of fresh loans falls below the amount of loan repayments in the remainder of the year). The previous all-time high stood at TRY711bn. It was recorded in 2020.
The government is seizing 40% of export and tourism revenues. Those companies that want to use export rediscount credits from the central bank are now obliged to sell 70% of their export revenues and to sign a document that shows they will not buy FX for the next one month.
Turkey’s trade and current account balances are always in deficit and its external liabilities are heavy. So, intermediary goods importers are facing difficulties in finding FX. The tightening cycle here is still working through.
FX derived from exporters and tourism companies is burnt to face FX demand and keep the USD/TRY stable.
The government is, meanwhile, introducing additional capital controls to prevent companies from buying FX or importing goods with loans.
Capital controls are not enough. Some desperate attempts to find some fresh FX are taking place.
In May, a limited recovery in external balances was expected as gas bills were set to decline and the tourism season began. However, a record $11bn trade deficit was reported for May.
June: $8bn. July: $11bn. August: $11.3bn, fresh record. Sep: $10.4bn.
So, the summer decline in gas imports did not produce the expected recovery in the trade balance. The central bankers worked harder to write bigger tourism revenues.
11 TURKEY Country Report October 2022 www.intellinews.com