Türkiye | Quarterly Debt Outlook. Second Quarter 2024

The indebtedness of the private sector remains below that of peer countries, though signs of deterioration in NPL ratios started to be seen. Banks’ FC liquid assets are solid enough to cover their ST external debt. FC credit evolution and swap policies of the CBRT will be decisive for banks’ FC liquidity.

Key points

• Key points:
• The low level of household indebtedness to GDP ratio continues. Although still being much lower than the historical rates, the NPL ratios are moving upward for credit card and GPL segments.
• After falling to its historical low deficit level of $76.5bn in Oct23, corporates’ net FX position has started to increase again and rose to $102.5bn in April24. The increase stems from the FC credits provided by domestic banks.
• Public banks continue to be the main holders of domestic public debt, while Eurobond issuances are the main source of external public debt.
• Local banks’ right way FC swaps with the CBRT have been almost finalized, which was an important portion of the sector’s FC liquid assets.
• Regarding external funding, the corporate and banking sectors continue to roll-over their external debt at higher ratios.

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