Turkish CB expects positive current balance in 2nd half

ANKARA

Turkey's Central Bank on Thursday projected that exports will rebound stronger than previously envisaged and a positive outlook in the current account balance will come in the second half of the year.

The recovery in exports will come as virus restrictions are relaxed, and low commodity prices will support the current account balance, the bank said after a meeting with both Turkish and foreign investors.

In a presentation on the macroeconomic outlook and monetary policy in Turkey, the bank said in the second half of the year, amid normalization, demand-side disinflationary effects will grow more evident.

It also said deleveraging in the corporate sector continues.

The bank’s “reserves cover total short-term FX financial debt repayments," it said, adding that it maintains adequate FX liquidity buffers to cover short-term external debt.

On inflation, the bank said it has been showing a downward trend since the monetary tightening, but picked up slightly in June.

Inflation is expected to decline over the medium-term, the presentation said.

It indicated medium-term inflation uncertainty has been reduced and inflation expectations continue to improve.