“Turkish banks’ foreign exchange liquidity has become dependent on the CBT”

International rating agency Fitch Ratings announced that Turkish banks’ available foreign exchange liquidity is sufficient but to the central bank.

25.11.2020 10:39:000

International rating agency Fitch Ratings stated that the Turkish banking sector’s available FX asset liquidities continue to be sufficient to cover short-term debt in foreign currency that is more sensitive to the market, but that banks’ FX liquidities are becoming more dependent on the Central Bank.

Fitch’s “Foreign Debt and Foreign Currency Leaderships of Turkish Banks: End of the 3rd Quarter of 2020” emphasized that Turkish banks maintain reasonable access to external funding markets despite the market volatility and significant depreciation of the Turkish Lira since the first quarter of 2020. .

Stating that the short-term external debt of Turkish banks increased from $ 82 billion at the end of 2019 to $ 84 billion at the end of the 3030 3rd quarter, Fitch said that their total foreign debt in the first 9 months of 2020
He stated that it decreased by 8 billion dollars to 135 billion dollars. Their banks stated that their potential 12-month foreign debt service needs were expected to be around $ 45 billion by the end of the third quarter of 2020.

Stating that customers ‘foreign exchange deposits reached 54 percent of total deposits at the end of the third quarter, foreign exchange deposits increased by 10 percent in 9 months to $ 242 billion, Fitch emphasized that this supports banks’ foreign exchange liquidity positions, and that this creates a liquidity risk in case of deposit outflow or instability. .

Stating that the available foreign exchange liquidity of the Turkish banking sector at the end of the third quarter is sufficient to meet a short-term closure in the market and a moderate outflow in foreign currency deposits at $ 82 billion, Fitch said, ” “This means an increase of around 25 percent since the end of 2019.”

When corrected with foreign currency receivables of the Bank of the Central Bank’s net foreign exchange reserves as a negative end of the third quarter of 2020 calculated that expresses Fitch “This is Turkey’s external financing, if banks remain eventually pay back using the liquidity of the Central Bank of Turkey is a significant amount of external debt, more It means that it can be under too much pressure, “he determined.

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