NEWS Finance        16/04/2020

Turkey’s private sector foreign debt is USD 185.5 billion as of February 2020

The Turkish presidential decree no.1814 and dated 04.12.2019 had authorised that the shareholding of 58.51% held by the Directorate General of Foundations in Vakıfbank be transfered to the Treasury, resulting in the bank being reclassified as a public institution. Accordingly, the external debt of Vakıfbank has started to be classified under the public sector as of December 2019. The external debt relating to Vakıfbank has been removed from the Turkish Central Bank’s table of Turkey’s private sector foreign debt in the preparation of its statistics for February 2020. In the Turkish Central Bank’s report for January 2020, the total private sector’s foreign debt as of 2019 yearend was USD 201.1 billion, but in its February report this debt figure was given as USD 189.8 billion.

 

The Turkish Central Bank (TCMB) has reported the private sector’s outstanding short-term and long-term foreign debt as of February 2020. Short-term debt was USD 7.7 billion, USD 1.4 billion (15.1%) lower than the figure for 2019 yearend. Long-term debt was USD 177.9 billion, USD 2.9 billion (1.6%) lower than the figure for 2019 yearend. Total private sector foreign debt amounts to USD 185.5 billion as of the end of February 2020, which is USD 4.3 billion (2.2%) lower than the total debt for 2019 yearend. 

 

Of the USD 185.5 billion total foreign debt owed by the private sector as of February 2020, 61.1% is denominated in US dollars and 33.2% in euros, 44% is owed by financial companies and 56% is owed by non-financial companies, and a total of USD 44.5 billion is to be repaid within one year.

 

The Turkish Central Bank’s review summary is as follows :

 

“Developments in Private Sector's Outstanding Loans Received From Abroad – February 2020     

 

As regards the private sector’s outstanding loans received from abroad, long-term loans recorded USD 177.9 billion as of February, decreasing by USD 2.9 billion; whereas short-term loans (excluding trade credits) realized USD 7.7 billion, decreasing by USD 1.4 billion in comparison to the end of 2019.

 

From the borrower’s side, regarding long-term loans, banks’ loan liabilities decreased by USD 987 million; whereas bond liabilities amounted to USD 21.4 billion, increasing by USD 181 million in comparison to the end of 2019. In the same period, non-bank financial institutions’ loan liabilities decreased by USD 444 million; whereas bond liabilities amounted to USD 3.6 billion, decreasing by USD 43 million. Non-financial institutions’ loan liabilities recorded a decrease of USD 1.2 billion in comparison to the end of 2019; while bond liabilities amounted to USD 7.5 billion, decreasing by USD 9 million as of February. Regarding short-term loans, banks’ loan liabilities realized as USD 4.7 billion, decreasing by USD 997 million; whereas non-financial institutions’ loan liabilities realized as USD 1.6 billion, decreasing by USD 105 million in comparison to the end of 2019.

 

From the creditor’s side, regarding long-term loans, liabilities to private creditors excluding bonds amounted to USD 122.7 billion, decreasing by USD 2.6 billion compared to the end of the previous year. Regarding short-term loans, liabilities to private creditors excluding bonds amounted to USD 7.3 billion decreasing by USD 1.5 billion compared to the end of the previous year.

 

Regarding the currency composition, of the total long-term loans in the amount of USD 177.9 billion. 61.9 percent consists of USD, 33.2 percent consists of Euro, 3.2 percent consists of Turkish lira and 1.7 percent consists of other currencies and of the total short-term loans in the amount of USD 7.7 billion, 42.2 percent consists of USD, 33.1 percent consists of Euro, 24.1 percent consists of Turkish lira and 0.6 percent consist of other currencies.

 

As for the sectoral breakdown by the end of February, of the total long-term loans in the amount of USD 177.9 billion, 42.7 percent consists of liabilities of the financial institutions; whereas 57.3 percent consists of the liabilities of the non-financial institutions. In the same period, of the total short-term loans in the amount of USD 7.7 billion, 75.9 percent consists of liabilities of the financial institutions. whereas 24.1 percent consists of liabilities of the non-financial institutions.

 

Private sector’s total outstanding loans received from abroad based on a remaining maturity basis; point out to principal repayments in the amount of USD 44.5 billion for the next 12 months by the end of February.”

 



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