Türkiye’s external liabilities hit 6-year high of $670B in Q2 2024

Türkiye’s external liabilities surged to $670.2 billion by the end of the second quarter of 2024, reaching their highest level since the first quarter of 2018, according to data from the Turkish central bank’s International Investment Position (IIP). This marks a 10.1% increase from the end of 2023, when external liabilities stood at $608.7 billion.

Türkiye’s external assets and liabilities deficit widened

The net international investment position (NIIP) deficit, which represents the difference between Türkiye’s external assets and liabilities, widened to $328.5 billion by June 2024, an 18% increase from $275.9 billion at the end of 2023.

Growth in Türkiye’s external assets

Türkiye’s external assets grew by 2.7% during the same period, totaling $341.7 billion.

• Reserve assets: Reserve assets, a key component of Türkiye’s external assets, increased by 1.4% compared to the end of 2023, reaching $142.9 billion.
• Other investments: Other investments, which include foreign currency and Turkish lira deposits held by banks, saw a 2.4% rise to $127.4 billion. Bank deposits in foreign currencies and Turkish lira grew by 9.8%, reaching $51.2 billion.

Significant increases in liabilities

Direct investments: Türkiye’s direct investments, accounting for market value and exchange rate changes, jumped by 23.6% from the end of 2023, reaching $188 billion.

Portfolio investments: Portfolio investments also saw a significant increase, rising by 24.8% to $119.7 billion.

• Foreign investors’ equity holdings in Türkiye climbed by 34.6% to $39.8 billion.
• The stock of government bonds (DIBS) held by non-residents increased by 298.2%, reaching $10.5 billion.
• The Treasury’s bond stock, after excluding bonds held by domestic residents, grew by 4.5%, reaching $44.4 billion.

Other investments: Other liabilities, which include various financial obligations, increased by 0.5% from the end of 2023, totaling $362.4 billion.

• Foreign currency deposits held by non-residents in Turkish banks decreased by 5.6%, falling to $40.8 billion.

• In contrast, non-residents’ lira deposits in Turkish banks surged by 30.5%, reaching $22.2 billion.
• The total loan stock for Turkish banks grew by 5.8%, reaching $66.3 billion, while the loan stock for other sectors decreased by 1.1% to $100.1 billion.