By Joshua Kirby
Turkey booked a larger deficit in its current account in January as its primary-income gap widened, suggesting the central bank will need to maintain its current tight monetary stance.
The country's balance of payments, a measure of the gap between inflows into and outflows from the country, stood at a deficit of $2.56 billion in the first month of 2024, widening from $2.13 billion a month earlier, according to figures published by the central bank on Tuesday.
A widening deficit in primary income was behind the larger gap, while the goods deficit eased a little and the surplus in services stayed stable, boosted by tourism.
Turkey last year booked rare surpluses in its current account as a summer travel boom brought a wave of dollars into the Mediterranean nation. But a steady weakening of the Turkish lira has fuelled rampant domestic inflation and sent import prices soaring, tilting the balance into deficit.
The central bank last year embarked on a course of interest-rate cuts in a bid to tame price rises, with some success. The bank expects inflation to ease to 36% by the end of the year from more than 67% currently, and has signaled it will leave its key rate elevated for as long as it takes to bring price rises down to target.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
03-12-24 0328ET
