Foreign Investors Show Renewed Confidence in Turkish Bonds with Ten Consecutive Weeks of Purchases

Net Inflows into Government Debt Reach New Highs, Signaling Strong International Interest Amidst Market Adjustments

Foreign investors have continued their purchasing streak in Turkish government bonds for the tenth consecutive week, highlighting renewed confidence in Turkiye’s debt instruments. In the week ending May 31, they acquired a net $94.1 million in Government Domestic Debt Securities (DIBS), raising the total foreign-held DIBS stock to $9.94 billion, the highest level since March 2020, according to the latest data from the Central Bank of Turkiye (CBRT).

The CBRT’s weekly securities statistics revealed that alongside the significant bond purchases, foreign investors also increased their holdings in non-government sector assets by $20.8 million. However, there was a notable sell-off in equities, with $528.8 million in net sales, indicating a shift in investment strategy towards more secure debt instruments amidst economic fluctuations.

Turkish Government Bonds Attracting Strong International Interest

The consecutive weeks of foreign investment in DIBS mark the first time since 2012 that such a sustained interest has been observed. This trend pushed the total stock of DIBS held by foreign investors from $9.86 billion to $9.94 billion, achieving a four-year peak.

While foreign-held equity stock saw a decline from $42.32 billion to $41.12 billion within the same period, the non-government sector asset stock increased from $283.7 million to $303.4 million. This dynamic indicates a growing preference for fixed-income securities among international investors as they navigate through market adjustments and seek stability.

The recent surge in foreign investment in Turkish government bonds underscores the appeal of Turkiye’s debt market, reflecting positive sentiment and confidence in the country’s fiscal policies amidst global economic uncertainties.

Source: AA / Prepared by Irem Yildiz

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