But my question will be that we also have to find aditional 200 billion dollars for a year to pay our (private and public sector) foreign dept. (total dept:500 billion usd) Why nobody talks about this issue ?? Does anyone have an idea ?
It's been talked about a number of times....search "debt" in this thread....I commented few times ~ 200 billion matures in FY 2022.
24 billion or so matured in late November (just completed)....that was the single largest monthly maturity Turkey had to pay (i.e avoid default) till then and I don't think any month upcoming will be that high....but the repayment schedule (simple 200/12 = 17 on average per month) is still severe.
That is part of reason you are seeing TL go extra bad right now....was this november repayment.
All kind of currency swaps were done by TCB (to pay this debt)....on top of USD selling to try hold TL value. It is creating a crazy (unsustainable) suction demand of USD that Turkey (govt) is throwing last reserves of its credibility (leveraging larger national credibility as well) to finance.
The continued debt pressure will mean continued depreciation, loss of further long term Lira credibility (as more non-market swaps are done...which are political leverages other countries will call in later) and of course inflation.
The net balance of payment has to equal zero (i.e current and capital account have to sum to zero....same thing as energy/mass can neither be created or destroyed, just transferred).
Current account is in deficit, so capital account is in surplus by same amount (even though most of "visible" capital account is in deficit).
People might think "capital account surplus" is good (surplus = good), when it can be really bad....as it depends which components of the capital account are the surplus components ( i.e is the surplus provided "invisibly"?).
In this case, its the currency swap (regarding forex) process providing the surplus (in capital account and essentially funding the current account deficit)....all of which carry significant compromises for TR geopolitically.
Extent of nature of which can only be investigated and explored by fresh pair of eyes (new administration).
So I think we will have to ask for foreign exchange anyway unless we have 600 billion usd export and 400 billion usd import which is pretty much impossible for a long period.
Well not exactly. Debt is mostly mid-long term and put in capital account (as capital acct liability i.e negative)
What you are talking about (exports - imports) is a 1 year time frame of current account (exports are + and imports are - ...and there are some other "current" income flows too ).
Current account surplus will be very useful in the overall balance of payment structure (as the pressure feeds to capital account pressure for govt to buy monetary instruments in USD etc to stockpile as forex...as assets in cap Acct i.e positive).....
but not necessary.
It is generally good to have as long term objective though as it is sign of naturally productive economic expansion (relative to world)....and like you mention needs good investment in all resources (capital, human etc).
But the immediate issue for Turkey is the capital account. This needs to be squared away and solid (it is the base) before current account structure strategy comes into picture. Current account leverages a HUGE deal from the capital account after all.
In short and mid term, Turkey can only shore up its capital account by increasing credibility and trust (in both Lira and the system backing it and operating with it) to attract long term savings and investors in currencies it does not issue (USD, Euro etc).
Turkey credit rating is speculative for example (BB range). It is likely to downgrade further with these atrocious mixed-signalling policies being done. Ideally Turkey needs to get that credit rating to investment grade and keep it there for a long time.
This conversation only really starts with a new administration.
www.veryansintv.com
and also we need highly qualified workers and they sould be in millions in numbers which is also not possible for a long time. There are lots to add but this will be enough for now.
