Net capital outflows
Reserves were down last week. Gross reserves (including gold) minus gross FX reserves only shows that gold reserves amount to $20.273 billion. Since net reserves (including gold) stand at $24.9 billion currently, net reserves excluding gold are only $4.63 billion.
Excluding swaps, net FX reserves are indeed negative. They have been depleted since May 2013. Around $42 billion have eroded over the last 6 years, if we net off for swaps.
Reserve depletion has accelerated from August 2018 onwards. Because about $4.5 billion flew away, and because in August-December 2017 there was an inflow of around $20 billion, we are talking about approximately an across border official capital movement reversal of $25 billion.
Prof. Korkut Boratav has come up with around $29 billion outflow if we net off with net errors & omissions and expatriation of local capital. This is indeed huge.
This is why a narrowing current account deficit didn’t help stabilize the currency in the first place. Add to this the managerial indecision and various interventions that were (are) bound to be counterproductive. They were (are) in the main delaying devices. They don’t attempt to solve any financial or real sector problem; they simply postpone them.
BIST 100 is a case in point. But so are also nonresidents bond holdings. They both point at an outflow over the years, and this trend continues.
Given the poor status of portfolio inflows (outflows), and also given net FDAs leave to desire, there is no way to invest because we can’t even import much. The whole economy is dependent on overseas capital inflows, and unless they reverse anew there is no way out in the short-run.