Turkey runs October current account deficit of $133m

ANKARA

Turkey ran a current account deficit of $133 million in October 2015, down from $2.3 billion in the same month of the previous year, according to a report from the Central Bank of the Republic of Turkey released on Thursday.

“The current account deficit was at $133 million, indicating a narrowing of $2,176 million from October of the previous year, the report said.

This brought the 12-month rolling deficit to $38,109 million,” the report said.

The sharp narrowing came after a current account surplus of $95 million was run in September.

“The current account deficit fell to the narrowest level since 2009 due to plunging commodities prices, especially that of oil, and a weakened currency that slowed imports” Atilim Murat, Associate Professor from Tobb ETU University told Anadolu Agency on Thursday.

Murat pointed out that the good data came at a very useful time for Turkey which is still facing ongoing political and security risks. "This will boost investors appetite to do business in Turkey," he said.

“In this regard the current account data is good. I think, in the coming months, capital will start to come back to Turkish market,” Murat said.

Murat said that the upcoming interest rate hike expected from the Federal Reserve in December is already priced in at 90 percent by the markets. "A rate hike even might be beneficial for Turkey, as a strong dollar means weak commodity prices which are good for Turkey," he added.

“We already know that when dollar rises, commodity prices fall. In the near term, commodities and oil prices will fall. This will naturally reduce the current account deficit and I believe the current account deficit numbers in 2016 will be much better than in 2015," Murat said.

Associate Professor from Eurasia University Raci Hosgor said that, despite challenges, the Turkish economy proved that it is more resilient than many expected.

“I am optimistic about the future of foreign exchange reserves and the current account deficit. Also, I do not expect a significant reduction in capital flows after the FED decision, there even might be capital inflows stronger than current levels,” Hosgor said.