Turkey's current account deficit shrinks in May, lira reaches record low
Date
7/14/2024 5:37:10 AM
(MENAFN) According to the latest data from the Turkish central bank, Turkey's current account deficit for May shrank to USD1.235 billion, a figure below the USD1.5 billion deficit forecasted in a poll. This decline marks a significant improvement compared to April's deficit of USD5.437 billion and the substantial deficit of USD45.15 billion recorded for the entirety of 2023. The narrowing of the deficit comes amidst ongoing economic challenges, including currency fluctuations.
On Friday, the Turkish lira hit a new record low of 33.045 against the US dollar, reflecting ongoing pressures on the currency. This depreciation follows a period of heightened economic activity earlier in the year, with Turkey's GDP expanding by 5.7 percent year-on-year in the first quarter of 2024, up from 4 percent in the previous quarter.
In its latest monetary policy meeting, the Turkish Central Bank opted to maintain its benchmark interest rate at 50 percent for the second consecutive month. This decision aims to stabilize the economy and manage inflationary pressures amid volatile global economic conditions and domestic challenges.
The narrowing of the current account deficit offers a positive signal for Turkey's economic outlook, suggesting potential improvements in external balances. However, the record low of the Turkish lira against the dollar underscores ongoing concerns about currency stability and economic resilience, prompting continued scrutiny and policy adjustments by Turkish authorities to navigate these complex economic conditions.
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