Macro and Politics

*The CBT will release March Balance of Payment figures today @10:00 local time. We expect the current account balance to post a deficit of USD10.4bn in March. The market median forecast, which points to a deficit of USD9.7bn, remains below our house estimate. We estimate that the balance-of-payments-defined foreign trade deficit widened to USD9.9bn in March, while the services balance surplus likely stood at around USD2.4bn. Our year-end current account deficit forecast stands at USD45bn, corresponding to 2.6% of GDP. However, given the persistence of elevated global energy costs, we assess that risks to our forecast remain tilted to the upside.

* The Treasury borrowed TL86.5bn, including non-competitive sales, through yesterday’s auction of a 4-year TLREF-indexed bond. Demand remained robust, with the bid-to-cover ratio standing at 3.01x, while the auction cleared at a term yield of 19.22%. The Treasury also raised TL27.9bn through the direct sale of a 2-year USD-denominated bond and TL17.1bn via the direct sale of a 2-year lease certificate conducted yesterday. Accordingly, the Treasury’s total domestic borrowing since the beginning of the month has reached TL212.6bn. According to the domestic borrowing strategy for the three-month period covering May – July 2026, the Treasury plans to conduct TL381.7bn in domestic borrowing against TL347bn in redemptions in May, implying a rollover ratio of 110%. The Treasury will conduct direct sales of a 1.5-year gold-denominated bond and a1.5-year gold-denominated lease certificate on May 18 and finalize its domestic borrowing program for May. In line with its domestic borrowing strategy, the Treasury is expected to borrow approximately TL169bn through the direct sales scheduled for May 18.