Macro and Politics
Tacirler Investment
* The Treasury and Finance Ministry will release October cash budget figures @ 17:30 local time. The Treasury cash balance posted a deficit of TL467.2bn in September, alongside a primary deficit of TL193.3bn. Accordingly, the cumulative Treasury cash deficit reached TL1.9tn in Jan–Sep, while the primary balance registered a surplus of TL312.5bn over the same period. Meanwhile, the central government budget recorded a deficit of TL532.2bn in September, with a primary deficit of TL269.2bn. The cumulative budget deficit stood at TL1.8tn in Jan–Sep, corresponding to 67.8% of the full-year deficit target of TL2.7tn for 2026. The trailing 12-month budget deficit widened from TL2.2tn to TL2.4tn. October Treasury cash balance figures, due on Friday, November 6, will provide an early indication of the October central government budget balance, scheduled for release on November 16. We maintain our 2026 year-end budget deficit forecast at TL2.8tn (3.3% of GDP).
* Foreign investors were net sellers of USD66.3mn in the equity and USD750.4mn in the bond market (excluding repo transactions), during the October 23–30 week. Bond outflows reached their highest weekly level since the April 3 week, while foreigners’ share in the total bond stock declined from 6.5% to 6.2%. Moreover, equity outflows extended into a fifth consecutive week, bringing cumulative net foreign sales over the period to USD693mn. Residents’ FX deposits (excluding gold and adjusted for the EUR/USD parity effect) increased by USD748mn during the October 23–30 week, while their total FX deposits (including gold, adjusted for the price effect) rose by USD585mn. The CBT’s gross reserves declined by USD4.1bn to USD158.1bn, net reserves fell by USD4.8bn to USD37.9bn and net reserves excluding swaps contracted by USD6.5bn to USD24.2bn. Based on our calculations, the decline in gold prices accounted for USD694mn of the weekly reduction in net reserves, while we estimate that the CBT conducted approximately USD5.9bn in FX sales to the market over the same period.