Mysterious capital flows to Turkey have reached new highs, Bloomberg reports
Turkey: Recep Tayyip Erdogan and his country are in trouble, judging by a recent article in the Financial Times.
In this lengthy article it is stated that the neighbors have taken in about $24,400,000,000 more this year than they can justify.
The latest figures from the Turkish central bank show that the country’s current account deficit continued to widen in July, bringing the total deficit this year to $36.7 billion.
Ankara’s experimentation with interest rates has led to an uncontrollable fall in the lira over the past year.
President Recep Tayyip Erdogan is a champion of low-cost borrowing, espousing an unorthodox theory that lower interest rates should lead to lower inflation.
“Mysterious capital flows to Turkey have hit new highs, allowing policymakers to shore up foreign reserves despite a widening trade deficit and weak demand for sterling assets.
Ankara’s central bank said money unaccounted for in its monthly balance of payments data rose to $5.5 billion in July, bringing the tally for the first seven months of the year to $24.4 billion. Both are records, according to data going back nearly four decades.
Tourism revenue alone cannot explain the numbers. In July, vacationer receipts were $4.5 billion, bringing the January to July tally to $16.4 billion. This is about 70% of accounting errors and omissions during the same period.”