Turkey Current Account Gap Narrows for 11th Month on Imports

Turkey’s current-account deficit narrowed for an 11th straight month in September as a slowing economy and tighter monetary policy curbed imports while gold sales pushed exports up.

The deficit shrank to $2.7 billion from $6.4 billion a year earlier, the central bank in Ankara said on its website today. It was forecast at $3 billion, according to the median estimate of 10 economists surveyed by Bloomberg. The 12-month gap fell to $55.8 billion from $77 billion at the end of 2011.

Turkey’s central bank has sought to reduce the current-account deficit from a record 10 percent of gross domestic product last year by tightening monetary policy and bank lending rules to curb a spending boom that pulled in imports. At the same time, the country has worked to diversify its exports away from crisis stricken Europe to Asia, the Middle East and Africa.

The deficit has declined to 7 percent of GDP and “we expect to see further improvement” next month due to “the overall slowdown in economic activity, increasing gold exports and relatively lower petroleum price,” said Ozgur Altug, chief economist at BGC Partners in Istanbul. The decline may slow or end in November, he said in an e-mailed note.

Turkey’s economic growth slowed to 2.9 percent in the second quarter, the lowest since 2009, leading central bank Governor Erdem Basci to reverse course and begin loosening monetary policy.

The lira rose 0.3 percent to 1.8015 at 12:25 p.m. in Istanbul and the benchmark ISE National 100 stock index gained 0.2 percent. Yields on 2-year lira bonds declined 2 basis points to 6.4 percent.

Fitch Ratings cited the narrowing of the current-account deficit when it raised Turkey to investment grade earlier this month.

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