June's financial results reveal a shortfall of $2 billion in the account's balance.
In June 2025, Turkey's current account balance revealed a deficit of $2.006 billion, primarily due to gold and energy imports [1]. This deficit, however, was not the end of the story, as the country managed to finance this gap through various means.
The financing of this deficit involved several key factors. Net direct investments brought in a significant $4.8 billion, with non-residents investing $1.566 billion in Turkey and residents investing $950 million abroad. Loans contributed $21.1 billion, while commercial credits added $4.5 billion to the financing mix. Net portfolio investments, including $641 million in stock market purchases by non-residents, $114 million in government domestic debt securities, and $743 million in net purchases of overseas bank bond issuances, amounted to $4 billion.
However, net liabilities and deposits had a negative impact of $12.3 billion. This was partially offset by the Central Bank’s net foreign exchange reserves, which, unfortunately, declined by $20.3 billion during June, indicating reserve consumption to support the balance of payments [1].
Other sectors also contributed to the external borrowing, with banks and other sectors recording net utilizations of $2.098 billion and $445 million, respectively. The General Government made a net repayment of $36 million in external borrowing.
On a positive note, the current account balance excluding gold and energy showed a surplus of $2.579 billion, indicating that the deficit was driven mainly by gold and energy imports. Non-residents made net purchases of $743 million in bank issuances, while foreign currency deposits rose by $675 million net in non-resident banks' deposits in domestic banks. Residents' direct investments abroad rose by $950 million in June.
The Central Bank of Turkey released balance of payments data for June 2025, which revealed that net portfolio investments stood at $4 billion. Net sales occurred in General Government issuances at $179 million, and net sales occurred in other sectors at $37 million in overseas bond issuances. Turkish lira deposits declined by $181 million net in non-resident banks' deposits in domestic banks, but overall, non-resident banks' deposits in domestic banks increased overall by $494 million.
In summary, the current account deficit was driven mainly by gold and energy trade imbalances, and its financing relied on strong inflows from direct investments, loans, commercial credits, and portfolio investments, while partially offset by decreases in net liabilities and Central Bank reserves [1].
- The financing of Turkey's current account deficit in June 2025 was supported by various means, including net direct investments, loans, commercial credits, and net portfolio investments.
- Net direct investments brought in a significant amount, with non-residents investing $1.566 billion and residents investing $950 million abroad, contributing to personal finance and wealth management in Turkey.
- The balance of payments data revealed that net portfolio investments, including foreign currency deposits and overseas bank bond issuances, amounted to $4 billion, indicating a key role of fintech in financing the deficit.
- Despite decreases in net liabilities and Central Bank reserves, strong inflows from direct investments, loans, commercial credits, and portfolio investments helped to partially offset the negative impact, maintaining the influx of funds into the banking and insurance sector.
