Local firms’ foreign assets rise to $6.2 billion
Non-financial companies’ foreign exchange assets increased by $6.2 billion while their liabilities rose by $732 million in March compared to February, data from the Central Bank of Turkey showed on June 10.
Consequently, the net foreign exchange deficit of non-financial firms stood at $192 billion as of March, indicating a decrease of $5.48 billion from the previous month.
The Central Bank noted that on the asset side, deposits held by domestic banks, direct investments abroad and export receivables increased by $5.2 billion, $151 million and $841 million respectively, indicating an increase of $6.2 billion in assets.
On the liability side, domestic loans decreased by $383 million while external loans (excluding trade credits) and import payables increased by $157 million and $958 million respectively compared to February 2019. Accordingly, liabilities recorded an increase of $732 million.
In March, short-term domestic loans increased by $313 million, while long-term domestic loans decreased by $696 million compared to February 2019. Short-term external loans rose by $784 million and long-term external loans increased by $331 million, according to data.
The Central Bank also said that short-term assets of non-financial companies amounted to $100 billion.
“Short-term liabilities recorded $91.4 billion. Accordingly, short-term foreign exchange surplus was $8.7 billion indicating an increase of $4.97 billion compared to February 2019.”
Real effective rate declines
The Central Bank also announced that the consumer price index-based real effective exchange rate (REER) of the Turkish lira declined to 69.79 in May from 72.72 in April.
The REER adjusts the nominal effective exchange rate for the effects of relative prices. The REER released by the Central Bank is computed as the weighted geometric average of the prices in Turkey relative to the prices of its principal trade partners in international markets.
A higher REER points to the lira gaining value against foreign currencies while a decline in the index indicates it has lost real value.
Weaker currency generally helps countries boost their exports.
Trade Minister Ruhsar Pekcan announced on June 3 that Turkey’s exports hit its highest-ever monthly figure with $16.8 billion in May this year.
The country’s exports in May jumped 11.46 percent from a year ago.
In the same month, Turkey’s imports amounted to $18.5 billion with an annual decline of 19.85 percent.
“Turkey’s foreign trade balance in May posts a $1.7 billion deficit, improving from an $8.1 billion deficit a year ago,” Pekcan said.