Lira Drops as Current-Account Deficit Widens, Missing Estimates

The lira weakened after Turkey’s current-account deficit widened more than analysts’ estimated.

The lira gave back all of yesterday’s gain after central bank data showed the current-account gap expanded to $5.63 billion in January, from $4.69 billion in December, missing the $5.3 billion median-estimate of nine analysts in a Bloomberg survey.

“We expect imports to pickup in the coming months and current-account deficit to start to widen gradually,” Turk Ekonomi Bankasi AS (TEBNK) analysts including Selim Cakir and Emre Tekmen wrote in a note. The deficit will probably reach $60 billion or 6.7% of gross domestic product this year, the analysts said.

The lira depreciated 0.5 percent to 1.8067 per dollar at 1:28 p.m. in Istanbul, after appreciating 0.5 percent yesterday. Yields on two-year benchmark notes were unchanged at 5.82 percent, after rising four basis points, or 0.04 percentage point, yesterday to their highest level in a month.

The current-account shortfall jumped to 10 percent of gross domestic product at $75.1 billion in 2011, sending the lira 18 percent lower in what was the world’s biggest depreciation. A slowing economy last year helped in stemming the deficit to $46.9 billion, according to revised figures released by the central bank today.

“In the coming period, the deficit will continue to increase and this is probably disturbing foreign investors,” Tufan Comert, a strategist at Garanti Securities in Istanbul, said.

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.