Total foreign debt of Turkish private sector reaches USD175.4 billion in August
Date
10/17/2024 12:34:18 AM
(MENAFN) As of August, the total foreign debt of the Turkish private sector reached USD175.4 billion, marking an increase of USD11.2 billion from the end of 2023, according to the latest report from the Central bank of the Republic of Türkiye (CBRT). This upward trend indicates a growing reliance on external financing by the private sector, reflecting both investment opportunities and the challenges posed by the current economic environment in Turkey.
The report details that long-term loans constituted a significant portion of this debt, totaling USD163.6 billion and rising by USD8.6 billion. In contrast, short-term loans amounted to USD11.8 billion, reflecting an increase of USD2.6 billion. This distinction between long-term and short-term borrowing is crucial as it highlights the different financing strategies employed by the private sector, with long-term loans typically associated with investment in growth and development.
In terms of currency composition, the report reveals that 57.6 percent of the total long-term debt is denominated in US dollars, while 35.2 percent is in euros. A smaller portion, 2.5 percent, is in Turkish lira, with the remaining 4.7 percent in various other currencies. For short-term debt, the US dollar makes up 45.9 percent, followed by 16.3 percent in euros, 32 percent in lira, and 5.8 percent in different currencies. This currency distribution highlights the significant exposure of Turkish firms to foreign exchange risk, particularly given the volatility of the lira against major currencies.
Additionally, the CBRT emphasized that the total outstanding loans received by the private sector from abroad are based on a remaining maturity basis. As of the end of August, principal repayments amounting to USD52.7 billion are scheduled for the next 12 months. This substantial repayment obligation underscores the importance of managing foreign debt levels carefully, as the private sector navigates the complexities of international finance amid changing economic conditions.
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