In the last two months, $6.9 billion of foreign investor inflow has been realized through housing, stocks, bonds and direct investment channels.
While international financial institutions raised their growth forecasts, Turkey, which has reduced its current account deficit to the lowest level in 11 months and which is expected to catch the downward trend in inflation since the last quarter, has been flooded by foreign investors from all directions. Foreign investors’ interest in Turkey has doubled, especially in the last 2 months, from international direct foreign capital inflows to stock-bond purchases, from housing sales to eurobond issuance. Foreign capital inflows reached $6 billion 885 million in the last 2 months, including the inflows through swap channels.
HISTORICAL RECORD IN HOUSING SALES
In August, the second-highest monthly sales of all time were made in house sales to foreigners. Housing sales of approximately $600 million were realized with 5,866 units, an increase of 50.7% compared to August last year. The number of sales achieved in August was recorded as the second-highest of all time, and as a historical record as of August. On the other hand, while 30 thousand 849 residences were sold to foreigners in 8 months of the year, the highest January-August figure of all time was reached.
4 TIMES DEMAND FOR EUROBOND
Foreign investors also showed a record demand for the Eurobond issuances carried out by the Treasury abroad. The Ministry of Treasury and Finance this week, within the framework of the 2021 foreign financing program, sold $2 billion 250 million in dollar-denominated double tranche bond issuance, consisting of an increase in the October 2028 bond and a new 2033 bond. More than 200 investors demanded bonds more than 4 times the issue amount. With this bond issuance, a total of $10 billion financing was obtained from international capital markets in 2021. According to the balance of payments table announced by the Central Bank this week, foreign direct investments in Turkey increased by 125% in July compared to June, reaching the highest level since February 2020 with $1 billion 36 million. The direct investment amount in the first 7 months of this year was $3 billion 110 million.
BIGGEST PURCHASE OF 8 MONTH
Foreign investors made a net purchase of $614 million in Borsa Istanbul and $685 million in the bond-bill market in the last 6 weeks. Foreign investors made the highest net purchase since December 2020 in Borsa Istanbul with $477.6 million in August. In the last 2 months, foreign inflows through the swap channel amounted to $1.7 billion.
BUDGET SURPLUS RECORD IN AUGUST
Turkey, which does not compromise on fiscal discipline even during election periods, made history with its budget performance in August. In August, budget revenues increased by 35% compared to the same month of the previous year and reached ₺146.5 billion, while budget expenditures increased by 31.6% to ₺105.7 billion. The budget surplus increased by 44.7% compared to the same month of the previous year and reached 40.8 billion liras, and primary surplus increased by 35.8% to ₺54.5 billion. In August, the highest monthly budget surplus in the last 15 years, tax revenues increased by 33% and reached ₺131.1 billion.
Source: Sabah / Translated by Irem Yildiz