According to data released by the Turkish central bank on Monday, Turkey's current account has recorded a surplus of $1.88 billion in September, a significant increase compared to the $357 million deficit reported last month. This marks the first surplus since June and only the second in the past two years.
Tourism Boosts Current Account
The surge in tourism during the summer season continued to contribute to the country's current account surplus. In September alone, foreign currency inflows from tourism amounted to more than $5 billion, contributing to a services surplus of $6.25 billion. However, Turkey's goods deficit remained at $3.66 billion, although it did narrow compared to the previous month.
Impact of Weak Turkish Lira
Over the years, the weakening value of the Turkish lira has resulted in increased import prices, leading to high inflation and negatively impacting the trade balance. To address this issue, the central bank has implemented substantial interest rate hikes in recent months aimed at stabilizing the lira's decline. Fortunately, these efforts have yielded some positive results, as inflation slightly eased in October after a period of continuous increases.