Data from the Turkish Central Bank showed, on Monday, that the country’s current account balance recorded a deficit of 5.15 billion dollars in February, more than double the figure recorded in the same month last year, as the increase in the cost of energy imports widened the scope of the deficit.
Eliminating the country’s chronic current account deficit, which stood at $14.9 billion in 2021, was among the primary objectives of President Recep Tayyip Erdogan’s New Economic Program which also prioritized growth, exports, jobs and interest rate cuts.
But the Ukraine crisis has raised the prices of oil, natural gas and grain, making it more difficult for Turkey to meet that target, given that tourism receipts may also fall this year due to a decline in arrivals from the two countries that are usually among the largest sources of tourists to Turkey.
The data showed that the deficit in the first two months of the year amounted to 12.14 billion dollars. The current account deficit recorded $2.42 billion in February 2021.
The latest Archyde.com poll forecast the deficit for the whole of 2022 would average $38.25 billion.
The Central Bank of Turkey data showed that the combined deficit for 12 months is currently $21.85 billion.
revenue share
In addition, an informed source said, on Monday, that the Turkish authorities are considering increasing the share of foreign currency revenues that exporters must sell to the central bank to reach 50 percent from 25 percent currently.
The source, who asked not to be identified, added that a final decision has not been taken so far. He said the authorities may decide not to change the current level or increase it in any amount, up to 50 percent.
Commissioning is limited to revenue in US dollars or euros.
In January, the government required exporters to sell 25 percent of their foreign currency earnings to the central bank, which is seeking to boost its reserves following a currency crisis late last year.
The amount of foreign currency that the central bank has purchased from exporters has not yet been disclosed.
The Turkish lira rose to 14.64 per dollar, after the Archyde.com report, from 14.7505 at the close on Friday.
Turkey’s total exports amounted to $225 billion in 2021. The government and economists expect exports to reach $250 billion this year.
The Turkish Central Bank’s net foreign exchange reserves hit a record low of $7.55 billion in January, mainly due to years of market intervention to prop up the lira. Reserves have tended to rise over the past three months.
The central bank has met market demand with at least $30 billion in foreign exchange since December through its reserves, as well as direct market interventions in 2019 and 2020, when it sold $128 billion to prop up the lira.
(Archyde.com)