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Money inflows of unknown origin headed for record in Turkey

As Turkey’s current account deficit continues to widen in the coming months, foreign currency inflows of unknown origin might end up covering more than 70% of the gap.
A man walks past a currency exchange office on May 05, 2022, in Istanbul, Turkey.
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Inflows of $17.5 billion from unknown sources covered more than half of Turkey’s current account deficit in the first half of the year — and the rate could reach a record level in the coming months, underscoring how acute the country’s need for foreign investments has become.

Turkey’s current account gap widened to $32.4 billion in the first half of the year, reflecting its worsening trade imbalance due to a global rise in energy and commodity prices on top of the depreciation of the Turkish lira. Official data indicate that inflows of foreign funds, including direct and portfolio investments, were enough to finance only 8% of the gap, while 38% was met through central bank reserves and a whopping 54% by inflows of unknown origin. 

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