Türkiye | Quarterly Debt Outlook 3Q 2025

Summary

The total FX position of the economy continued to improve in 3Q25 (with the latest data of Aug25) due to an improvement in public sector’s FX position, led by the CBRT. The composition of external debt continues to shift between the public sector and the real sector.

Key points

• Key points:
• Households’ financial assets to GDP fell to 38.7% in 2Q25 (vs. 39.6% in 1Q25) due to the deceleration in their deposit growth. Regarding the asset breakdown, the fall in the share of deposits seems to be replaced by that of equities
• The main financial assets of households remain to be deposits. However, size of money market funds (7 trillion TL, almost 1/3 of total deposits) stays as a risk to financial stability for the coming months.
• Total indebtedness of corporates declines; and remains below EM and DM averages. Net FX short position reached its highest level seen since 2018 with $185bn, increasing their vulnerability to a currency shock. However, real sector’s access to external financing remains to be solid, as seen in their increasing FC credits and issuances obtained externally.
• Public debt to GDP remains low. However, reliance on gold borrowings, increasing burden of interest paymens due to high interest rates (caused by the slower than expected disinflation path) and decreasing maturities remain as risk factors.
• The share of FC wholesale funding is increasing in banks, led by the acceleration in their sub-debt issuances. On the other hand, maturities of external debt are extending with the increasing share of LT debt, supporting the LT external roll-over ratios and their FC liquidity.

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