The business cycle

Turkey: Balance of Payments

By October 11, 2018 No Comments

 BoP consolidation according to plans

The August current account data showed a surplus of USD2.6bn, a great improvement relative to a deficit of USD0.9bn a year earlier and in line with our model projections. We see the balance of risk biased towards further depreciation as in our view markets are not yet fully pricing the global downturn and the contraction in Turkey which we see as plausible given the recent developments. However, we flag that non-residents’ positioning in the local bond market may have hit the 2009 low by now, which suggests the conditions for a more favourable trend for the local bond market are building.