Lira sends Turkish current account into surplus
An employee holds a wad of 200 Turkish lira banknotes in a currency exchange in Turkey. The lira’s slump two months ago wasn’t all bad news. Turkey’s current-account balance posted its biggest monthly surplus on record in August, the first time there was no deficit since September 2015, according to central bank data published yesterday. The current-account surplus was $2.6bn, slightly higher than what economists in a Bloomberg survey were expecting and a reversal from a $1bn deficit a year earlier. The monthly figure brought Turkey’s 12-month trailing deficit to $51.1bn, or more than 5% of the country’s gross domestic product. While that would make Turkey’s foreign imbalance one of the highest as a ratio of output among the Group of 20 countries, the deficit is clearly narrowing. The annual gap will equal just over 4% of GDP by the end of next year as Turkish trade and tourism get a boost from a weak currency, according to Halk Yatirim economist Banu Kivci Tokali in Istanbul. “The current foreign-exchange rate, the level of oil prices and signs of a slowdown in the economy in line with our expectations indicate that the improvement in Turkey’s current account will continue,” Tokali said by e-mail.