Turkish firms’ long-term foreign debt shrinks $10.9 billion in 2018

Turkish companies’ long-term borrowing from abroad shrank by $10.9 billion in 2018 compared with the previous year, the central bank said.

The borrowing, including loans and bonds, fell to $210.6 billion, the central bank in Ankara said on Tuesday. Most of the decrease was from repayment of loans by banks – that stock of debt fell by $8.9 billion to $56.4 billion. Non-financial companies increased their loans by $1.9 billion to $87.6 billion, it said.

Turkish companies are seeking to meet their obligations to foreign creditors after a currency crisis ripped through the economy last year, making loans more difficult to repay. The lira has since recovered from record lows against the dollar, but is still almost a third weaker than it was at the start of last year.

On a quarterly basis, the debt stock fell from $214.9 billion at the end of September, $220.9 billion in June and $226.4 billion in March, the central bank data showed.

Banks’ bond liabilities dropped by $2 billion to $28.5 billion in 2018, while the bonds owed by non-financial institutions decreased by $500 million to $6.5 billion, the central bank said.

The total debt of $210.6 billion also included loans and bonds of non-bank financial institutions, which stood at $17.2 billion, as well as loans from parent companies and affiliates, and in the form of trade credits, which totalled $14.4 billion.