March balance of payments data shows record reserve drop and capital outflows, raising depreciation risks amid inflation concerns.
Turkey’s current-account deficit surged to $9.7bn in March, nearly doubling from prior levels, as energy price shocks and trade disruptions weighed on the economy. Capital outflows intensified, with portfolio investments recording a $14.8bn net outflow and other investments shedding $11.7bn, leading to adverse financing flows.
The deterioration triggered a record $43.4bn drop in official reserves, exacerbating concerns over the lira’s stability. Inflation is expected to accelerate further, while the Central Bank of the Republic of Türkiye has refrained from additional monetary tightening.
Analysts warn the policy stance increases the risk of disorderly depreciation, forecasting USD/TRY at 55.0 by year-end.