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Turkey’s external debt up to 1-year maturity $174.9 bln at end of January: central bank

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Turkey’s central bank said on Monday that the country’s external debt maturing in a year or less stood at $174.9 billion at the end of January, down nearly 0.2 percent from a month earlier, state-run Anadolu news agency reported.

Public-sector debt made up 21 percent of the total debt stock. The central bank accounted for 20.5 percent and the private sector 58.5 percent, the bank said.

Short-term external loans taken out by banks increased by 5 percent to $13.2 billion compared to the end of December, it said. The short-term debt of state banks rose 3.4 percent to $35.7 billion in the same period, while the private sector’s short-term external debt declined 1.4 percent to $93.1 billion.

Looking at the currency composition of short-term external debt, 50.5 percent was denominated in dollars, 22.5 percent in euros, 10.8 percent in Turkish lira and 16.2 percent in other currencies.

Fitch Ratings this month upgraded Turkey’s long-term foreign-currency issuer default rating (IDR) to “B+” from “B” while also revising the country’s outlook from “stable” to “positive.”

However, the rating firm noted a high level of external debt maturing over the next 12 months as a potential vulnerability to changes in investor sentiment.

Turkish President Recep Tayyip Erdoğan’s economic strategies, from 2017 onward, boosted economic growth while jeopardizing the value of the lira and price stability.

Faced with a financial crisis characterized by a rising cost of living and a decline in foreign investment, Erdoğan recalibrated his approach after his re-election in May.

Since the election in May, which gave Erdoğan another five years at the helm, Turkey has taken more aggressive steps to tighten monetary policy than expected.

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