Turkey posts current account surplus for second month

Turkey recorded a current account surplus for a second month in September after a slide in the lira’s value brought a slump in demand for imported goods.

The surplus was $1.83 billion for the month compared with a deficit of $4.44 billion a year earlier, the central bank said on Monday. Economists had predicted a surplus of $2 billion. It was the first consecutive surplus since 2015.

The 12-month rolling deficit narrowed to $46.06 billion, or 5.2 percent of recorded economic output, from $51.1 billion in August, or about 5.8 percent of GDP.

The Turkish lira has lost almost a third of its value against the dollar this year after investors fretted over an overheating economy and Turkish President Recep Tayyip Erdogan clashed with the Trump administration over the detention of a U.S. pastor and a Turkish invasion of neighbouring Syria that undermined the U.S. fight against ISIS.

The goods deficit, which includes consumer products and manufacturing imports, shrank to $825 million, a decrease of $5.9 billion from September 2017. The current account, excluding gold and energy, recorded a surplus of $5.08 billion compared with a deficit of $588 million a year earlier.

Direct investment recorded a net inflow of $827 million, increasing by $186 million compared to the same month of the previous year. Portfolio investment, however, recorded a net outflow of $904 million, as foreign investors concerned about financial stability sold stocks and bonds. Other investment recorded a net outflow of $4.8 billion.

The central bank’s official reserves saw a net outflow of $3.45 billion as policymakers sought to defend the lira.

The lira fell 0.7 percent to 5.495 per dollar at 11:18 a.m. in Istanbul.

Turkey current account