ANKARA: Turkey attracted $7.9 billion of income from unexplained sources during the first eight months of 2014, compared to an outflow of $90 million during the same period a year ago, according to the central bank data. In the three months that followed, $5.6 billion of that left the country.
Unexplained flows of foreign funds into and out of the economy marked as “net errors and omissions” in Turkey’s Balance of Payments report showed violent swings during the first 11 months of 2014. Outflows in November were estimated to be $3.46 billion, the biggest monthly exodus in more than 16 years, according to central bank data.
Massive amounts of mysterious inflows or outflows raises doubts about Turkey’s ability to finance its current-account deficit, which the government has called the economy’s “Achilles Heel.” Note that it’s not uncommon for countries to have “net errors and omissions” in their balance of payments sheets. What makes Turkey’s “puzzling” is how big these flows are as a ratio to the country’s current account deficit, according to Ipek Ozkardeskaya, an emerging markets strategist at Swissquote Bank SA in Geneva.
