Turkey posts current account deficit of $3.46 billion for June

Turkey’s current account deficit widened to $3.46 billion in June, the central bank said on Thursday.

The deficit grew by $2.27 billion from June last year, the central bank reported on its website. The 12-month rolling deficit increased to $32.7 billion, it said.

The current account gap grew due to the deficit in the foreign trade of goods, which expanded to $6.43 billion, increasing by $4.79 billion from June 2021.

Turkey's negative balance of payments is pressuring the lira, which has lost more than a quarter of its value against the dollar this year. The government is aiming for a current account surplus under an economic programme that has involved cutting interest rates despite faster inflation to help exporters and manufacturers borrow more cheaply.

The central bank reported a $3.98 billion inflow under net errors and omissions, which includes items it cannot account for. That was the highest monthly figure this year. The inflows totalled $17.5 billion in the first half of the year, which meets more than half of the first half current account deficit, compared with $6.83 billion in the same period of 2021.

The $17.5 billion figure "looks dodgy and might in part be Russian cash," Tim Ash, senior emerging markets strategist at BlueBay Asset Management in London, said on Twitter.

The current account, excluding gold and energy, posted a surplus of $4.29 billion in June compared with $1.93 billion a year earlier.

Official reserves registered a net outflow of $1.96 billion, bringing the total to $12.3 billion so far this year. Turkey's central bank has sold its foreign currency reserves to support the lira.

Portfolio investment recorded a net outflow of $1.58 billion, the central bank said.

(This story was updated with details/quote in the fifth and sixth paragraphs.)

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