Turkey: Record increase in foreign currency deposits of companies

According to the weekly data released by the Central Bank of the Republic of Turkey, total foreign currency deposits increased by 3.77 billion dollars in the week of August 5, adjusted for the parity effect. Compared to the previous week, foreign currency deposits of real persons decreased by 498 million dollars, while foreign currency deposits of legal entities increased by 4.27 billion dollars.

The upward momentum in companies’ foreign exchange deposits continues. While foreign currency held by companies remained on the agenda in the economy, the latest data showed a rapid increase in foreign currency deposits. According to the data of the Central Bank of the Republic of Turkey, foreign currency deposits of legal entities increased by 4.5 billion dollars to 85.2 billion dollars in the week of August 5. Thus, the record was broken on a weekly basis. Excluding the parity effect, it was observed that there was an increase of 3.8 billion dollars in total foreign currency deposits. The size of foreign currency deposits rose to $249.4 billion in the week of August 5.

According to the CBRT data, the current account deficit was $3.46 billion in June. The median expectation of 16 economists surveyed by Bloomberg was that there would be a current account deficit of $3.40 billion. May current account deficit was revised from $6.47 billion to $6.57 billion. Turkey’s credit default swaps fell for the seventh day of sustained decline, hitting their lowest level since May. While the rally in dollar-denominated government bonds continues, the narrowband movement of USD/TL continues below 18. The 5-year CDS decreased to 663 and the 10-year Eurobond yield decreased to 9.4%, as the decreasing inflation concerns in global markets affected the risk appetite positively. USD/TRY found buyers at 17.9601. Continuing to break the record, BIST-100 index rose to 2,862 points. The US 10-year Treasury rate fell to 2.77%.

At the current level, we will continue to follow the trends in the FX-linked product focused on dollarization, reserve cumulation and financial stability. In addition, although a breakdown of FX and TRY accounts has not been published, we consider that this distinction is 55% conversion from FX to TRY and 45% direct TRY account opening in line with the statements of the Ministry of Treasury and Finance. The financial dollarization rate is at the level of 54.86% as of the week of August 5, an increase is observed from the rate that was 54.72% in the previous week. This rate was 55.2% in the same period of the previous year.

Kaynak: Tera Yatırım
Hibya Haber Ajansı