Uncertain foreign exchange savior or threat?

If the fear of recession has gripped the global economy, if money is getting harder and more expensive in global markets, the balance of payments will be economy becomes a critical parameter for In these conditions, if your current account deficit is increasing rapidly, international funds are staying away from you, if your credit rating is at the bottom, your risk premium is at the top, if your foreign currency reserves are in full swing, the developments in the balance of payments become a vital issue for you beyond critical. In terms of economy, in terms of domestic and foreign policy…

This is exactly the situation in Turkey.

Under these circumstances, when we look at the balance of payments data for July, which was announced yesterday, we are faced with a situation that is getting more and more dire:

– The monthly current account deficit increased by 12 times compared to the previous year and exceeded 4 billion dollars. The 7-month total deficit reached $36.67 billion, 2.7 times the previous year.

– Energy prices are not solely responsible for this rapid increase in the current account deficit. For example, the current account surplus excluding energy, which was 3 billion dollars in July last year, decreased to 2 billion dollars this year. Besides tourism and despite the fact that the current surplus in other services produced a surplus of $2.27 billion higher than last year.

– There is a similar situation with a total of 7 months. 7 months total energy Excluding the current account surplus, the current account surplus increased by $5.23 billion compared to the previous year. Considering that the increase in tourism and other services revenues increased by 10.63 billion dollars in the same period, it is clear that there is a deterioration far beyond the effect of energy in items other than services.

– Despite the current account deficit of 36.67 billion dollars in the first 7 months of the year, there was a net resource inflow of 28.75 billion dollars. As a result, there was a meltdown of 7.3 billion dollars in foreign exchange reserves. However, in the same period of last year, an increase of 13.96 billion dollars was realized in foreign exchange reserves due to lower tourism revenues. On the reserves side, there is a negative difference of 21.89 billion dollars compared to last year.

– In capital movements, both foreigners and residents have a negative trend. The resource brought by foreigners in the first 7 months is 6.29 billion dollar and decreased by 30 percent to $14.65 billion. Direct investments maintained their level, but there was a 33 percent decrease in real estate estuary economic investments. There is an outflow of 7.65 billion dollars in stocks and bonds in foreign hot money, and an inflow of 16.18 billion dollars in deposits. 4.43 billion dollars of the deposit inflow is the money found by the Central Bank. As a result, foreign hot money inflows decreased by $6.27 billion and decreased by 42 percent to $8.54 billion.

– Residents have also increased the amount of resources they have taken out as direct investments and portfolio investments by 6.7 billion dollars and 122 percent to 12.2 billion dollars. In addition to making a net foreign debt payment of $2.71 billion, the banks gave out $8.72 billion in loans and raised $11.43 billion. On the other hand, the real sector had to take a new foreign debt of 13 billion dollars. As a result, the resources that the residents took out reached $6.76 billion and $10.22 billion with a 195 percent jump.

– While both locals and foreigners stay away from bringing money into Turkey, its source is uncertain. foreign currency The entrance exploded and broke the record. The source of 24.35 billion dollars of the 28.75 billion dollars net foreign resource inflow realized in the first 7 months is uncertain. If we add the 4.43 billion dollars deposit found by the Central Bank, this is the whole net inflow.

– If the foreign currency inflow of uncertain origin has reached 84 percent of the net resource entering the country, this means that this is no longer a “net error or omission” and has become a basic policy. The fact that foreign exchange reserves, excluding trust money, are in such negative positions, and the current account deficit is so high, that foreign currency inflows of uncertain origin play such a vital and vital role does not only increase the vulnerabilities in the economy. Money of uncertain origin now means that it has gained the potential of a threat that puts pressure on domestic and foreign policy and has become a political problem.

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