Skip to main content

Foreign debt risks hover over Turkish lira’s recovery

Saddled with chunky foreign debt repayments in 2021, Turkey might face hefty borrowing costs and renewed currency jitters.
Read in 

Turkey’s foreign debt repayments and the financing of its current account deficit will require at least $200 billion this year, threatening to push up borrowing costs and disrupt the recent gains of the battered Turkish lira unless Ankara rebuilds its credibility among financiers and investors.

The amount of Turkish external debt due to mature over 12 months stood at some $189 billion at the end of 2020, representing 43.4% of the country’s $435 billion external debt stock, according to central bank data released Feb. 18. The foreign debt stock, meanwhile, has come to account for nearly 60% of Turkey’s gross domestic product under the impact of economic downturn since 2018, fueled by the severe depreciation of the Turkish lira. The rollover of foreign debt has already strained Turkey in recent years, forcing it to borrow on higher interest rates.

Access the Middle East news and analysis you can trust

Join our community of Middle East readers to experience all of Al-Monitor, including 24/7 news, analyses, memos, reports and newsletters.


Only $100 per year.