(Updates with economist comment in fourth paragraph.)
July 29 (Bloomberg) -- Turkey’s trade deficit widened to the biggest on record in June, signalling that central bank efforts to rein in a surge in imports aren’t working.
The deficit was $10.2 billion in the month, up from $5.6 billion a year earlier, the statistics office in Ankara said on its website today. The figure exceeded last month’s then-record deficit of $10.1 billion and the median estimate of $9.5 billion from eight analysts in a Bloomberg survey.
Central bank Governor Erdem Basci said yesterday that the limits on bank lending he has imposed this year will help narrow the imbalance between imports and exports that’s threatening Turkey’s financial stability. The current-account balance, the widest measure of trade in goods and services, will improve in the last quarter of the year, he said.
“A new record trade deficit is not what we wanted at all,” Levent Durusoy, chief economist at Yatirim Finansman Securities in Istanbul, said in a telephone interview. “The measures taken so far will take some more time to work and for the impact of the shift in the exchange rate to be seen.”
Basci has held the benchmark one-week repo lending rate unchanged at a historic low of 6.25 percent since January, helping to weaken the lira about 8 percent against the dollar this year, the most of 25 emerging market currencies tracked by Bloomberg. The currency is no longer overvalued, Basci said yesterday.
Lira, Bonds Drop
The lira and bonds declined after today’s trade figures. The lira dropped 0.3 percent to 1.6813 per dollar at 10:15 a.m. in Istanbul and yields on two-year bonds rose 4 basis points to 8.85 percent.
Imports surged 42 percent to $21.6 billion in June, more than double the pace of growth in exports, which increased 19 percent to $11.4 billion, the statistics agency said today.
The 12-month current-account gap more than doubled from a year earlier to $68.2 billion in May, the most since records began in 1984 and equivalent to about 9 percent of gross domestic product.
--Editors: Ben Holland, Philip Sanders.
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