Emerging Insight: Turkiye: BoP pressures call for a tighter-for-longer stance

Research evidence excerpt

Emerging Insight: Turkiye: BoP pressures call for a tighter-for-longer stance

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Emerging Insight

Turkiye: BoP pressures call for a tighter-

for-longer stance

Key takeaways 18 May 2026

GEM Fixed Income Strategy &• BoP pressures have increased, though less than implied by March data; reserves have

Economics

partly recovered since April. Global

• A wider CAD, a softer financial account, and persistent errors & omissions point to

elevated external financing needs. Hande Kucuk Turkey & Israel Economist

MLI (UK)• FX stability remains the policy anchor, requiring a tighter‑for‑longer stance to contain +44 20 7996 3948

reserve drawdown. hande.kucuk@bofa.com

David Hauner, CFA >>

Global EM FI/FX Strategist

By Hande Kucuk MLIdavid.hauner@bofa.com(UK)

Exhibit 1: All major BOP components posted sizable outflows in March, leading to a large Claudio Irigoyen

reserve drawdown at $43.4bn Global Economist

Balance of Payments and Major Components ($bn) BofAS

claudio.irigoyen@bofa.com

50 See Team Page for List of Analysts

FDI Portfolio

40 Net Other Inv. Reserve Assets

30 Net errors and omissions CA Balance

BoP: Balance of Payments 10

0 CAD: Current Account Deficit

-10

-20

-30

-40

03/23 09/23 03/24 09/24 03/25 09/25 03/26

Source: Haver, BofA Global Research. Note: Positive values of reserve assets imply reserve drawdown, negative values elsewhere show

net outflows

BofA GLOBAL RESEARCH

Türkiye in focus

March balance of payments (BoP) showed the largest monthly reserve drawdown on

record—driven by a wider trade deficit, sizeable outflows in the financial account and

net errors and omissions. While some of the pressures will likely persist, March data

alone overstate the war’s impact and underlying FX demand; indeed, reserves have partly

recovered since April.