Current account gap decrease less than foreseen

Turkeyand’s central bank said on Thursday the countryand’s current account deficit (CAD) in April narrowed to $3.41 billion, higher than a market estimate of $3 billion.
The current account gap stood at $2.0 billion in January and at $3.2 billion in February. In March, the balance was $5.01 billion. During the first four months of the year, the total current account deficit of the country narrowed to $14.57 billion from $16.72 billion in the corresponding period a year ago. In 2014 Turkeyand’s current account gap was $45.84 billion.
One factor that limited an even bigger rise in the CAD in April was gold exports, which amounted to $1.82 billion, compared to $307 million of imports in the same month of 2014. Also, the amount of net errors and omissions — mysterious money inflow the source of which is unknown — rose to $ 2.89 billion in April, more than 10 times the $258 million registered in March. This item rose to $6.98 billion in the first four months of the year, the central bank figures showed.
Direct investment outflows involving distributed profits under the primary income item increased by $595 million to $892 million in April. Portfolio investment recorded a net inflow of $755 million as an increase in net liabilities. In regards to sub items through liabilities, non-residentsand’ equity security transactions recorded net purchases of $652 million, as government domestic debt securities recorded net sales of $1.02 billion. The market reacted slightly to the current account deficit data on Thursday. The main index Borsa Istanbul (BiST) fell below the 80,000 point mark. On Wednesday the BiST had recouped some losses after it fell to as low as 77,000 points, after falling by 5.05 percent after Sundayand’s general election results that marked an end to Turkeyand’s 13-year single party government.
The Turkish lira strengthened against the dollar on Thursday after President Recep Tayyip Erdogan called for the rapid formation of a new government and vowed to do his part, making his first public appearance since Sundayand’s election. The lira firmed to 2.7395 after Erdoganand’s comments from 2.7460 beforehand. Erdogan on Thursday urged the countryand’s political parties to work quickly to form a new government, saying egos should be left aside and that history would judge anyone who left Turkey in limbo. In his first public appearance since Sundayand’s parliamentary election, he said no political development should be allowed to threaten Turkeyand’s gains. He said he would do his part in finding a solution with the powers given to him by the Constitution. Prime Minister Ahmet Davutoilu said on Thursday said his party respects and”peopleand’s choice for a coalition.and”
Market experts have been saying that the Turkish markets will take a breather from months-long political pressure on central bank governor Erdem Baiandci. and”With Mr. Erdogan and his minions suddenly on the back foot, perhaps Mr. Baiandci will find the courage to actually raise rates,and” read an article in the Financial Times (FT) on Wednesday. Recalling that the Turkish lira has lost 15 percent of its value against the US dollar so far this year, becoming one of the worst performers among EM currencies, FT said: and”While any sensible central bank would have been raising interest rates under these circumstances, the CBRT [Central Bank of Turkey] has actually lowered its main repo rate from 8.25 percent to 7.5 percent since January. And instead of concentrating on fighting price pressures, it has muddied the waters over the past few years by targeting first one objective and then another — switching its attention from inflation to credit growth to the current account deficit and back again.andquot
hr h2New legal amendment limits cash outflow from Turkeyh2
Turkish citizens and foreign dealers will face new limitations on the amount of cash they can carry abroad, according to a new amendment to the law regulating the liraand’s circulation.
A law on the protection of the lira against foreign currencies was first introduced in 1989 and has been updated, including the latest amendment, 20 times so far. As a result, travelers will now only be allowed to carry $10,000 or 25,000 euros or less when they travel abroad.
The new law indicates that each traveler will be obliged to register with the Ministry of Economy within 30 days of their departure from Turkey and indicate that they are travelling with a large amount of cash. Market experts said the new change might unnerve carry traders and investors, and means a return to the ultra-protective rules of the 1980s when Turkey had a market that was relatively less integrated with global traders.
The amount of net errors and omissions — mysterious money inflows from unknown sources — rose to $ 2.89 billion in April, more than 10 times the $258 million registered in March. It rose further to $6.98 billion in the first four months of this year, central bank figures showed on Monday.