Private Sector's Foreign Borrowing Reaches $177.7 Billion

According to the data published by the Central Bank of the Republic of Turkey for October 2023, the total external credit debt of the private sector reached $177.7 billion. This figure represents an increase of $15 billion compared to the end of the previous year. When analyzed by maturity, long-term credit debt increased by $9.3 billion to $162.8 billion, while short-term credit debt (excluding commercial loans) rose by $5.7 billion to $14.8 billion.

By type of debtor, long-term borrowing by banks recorded an increase of $1 billion, while bond issues rose by $3.8 billion. The credit borrowings of non-banking financial institutions decreased by $318 million; however, their bond stocks increased by $301 million to reach $1.4 billion. Credit borrowings by non-financial institutions rose by $933 million, and their bond stocks increased by $2.7 billion to $13.4 billion. In terms of short-term borrowings, bank credit usage rose by $3.8 billion, while non-financial institutions' debts decreased by $365 million.

Looking at the distribution of debt by creditor and the currency composition, as of the end of October, long-term credit debts of the private sector (excluding bonds) increased by $3.7 billion to $108.9 billion compared to the end of 2023. In short-term credit debts, the liabilities to private creditors (excluding bonds) showed an increase of $4.7 billion, rising to $12.5 billion.

In terms of currency composition, 58.6% of long-term credit debt is denominated in US dollars, 33.9% in euros, 2.6% in Turkish lira, and 4.9% in other currencies. For short-term debt, 41.1% is in US dollars, 15.7% in euros, 38.8% in Turkish lira, and 4.4% in other currencies. This data reveals the diversity of currency use in credit and indicates that certain currencies are preferred.

In sectoral distribution, as of the end of October, 38% of the total long-term credit debt belongs to financial institutions, while 62% belongs to non-financial institutions. Among short-term credit debts, 80.2% comes from financial institutions and 19.8% from non-financial institutions.

Considering the remaining maturity period, it is observed that as of October, the total principal repayments of the external credit debt taken by the private sector amount to $55.5 billion.