The Short-term Foreign Debt of Banks Approaches $80 Billion

According to data from the Central Bank of the Republic of Turkey (CBRT), by the end of September 2024, the short-term external debt stock of banks increased by 15.5%, reaching $79 billion. In contrast, the short-term external debt stock of other sectors decreased by 3.9%, falling to $59 billion. These changes indicate a significant transformation in Turkey's external debt balances.

Banks recorded a substantial increase in short-term loans sourced from abroad. Compared to the end of 2023, these loans increased by 60.8%, reaching $20.3 billion. Conversely, the foreign currency deposit accounts of non-bank foreign residents decreased by 1.2%, down to $19.8 billion. Additionally, deposits from banks located abroad also dropped by 4.4%, again falling to $19.8 billion. However, deposits of foreign residents in TL increased by 26.8%, rising to $19.2 billion.

Debt in other sectors is decreasing The import debts under the category of other sectors decreased by 5.7% compared to the end of 2023, falling to $51.2 billion. This decline may reflect a contraction in import volumes or debt restructuring. When analyzed based on debtor categories, the short-term debt of the public sector, consisting of public banks, increased by 14.8%, reaching $39.6 billion, while the short-term external debt of the private sector rose by 3.3%, reaching $98.4 billion.

Short-term debts to monetary institutions under private creditors fell by 1.4% compared to the end of the year, decreasing to $94.2 billion. Debts to non-monetary institutions also decreased by 3.2%, dropping to $76.1 billion. Short-term bond issuances increased from $1.7 billion to $6 billion. Short-term debts to official creditors amounted to $47 million.

Exchange rate composition and debt maturity stand out As of the end of September 2024, examining the currency composition of the short-term external debt stock reveals that 47.3% is in dollars, 22.4% is in euros, 14.8% is in TL, and 15.5% is in other currencies. This composition highlights the impact of exchange rate fluctuations on Turkey's debt balance.

The short-term external debt stock, based on remaining maturity, was identified as $233.1 billion. Of this stock, $21.4 billion stems from debts owed by banks and private sector subsidiaries located abroad. It was recorded that the public sector accounted for 23.7%, the Central Bank for 16.5%, and the private sector for 59.8% of the total stock. These ratios indicate the predominance of the private sector in the distribution of debts.