Turkey’s trade deficit narrows after imports slump on weak lira

Turkey’s trade deficit narrowed sharply in September as exports rose for a third straight month and imports slumped, driven by a slowdown in economic activity and a weaker lira.

The gap in foreign trade was just under $5 billion, compared with $9.6 billion a year earlier, according to preliminary data announced by Trade Minister Omer Bolat on Wednesday. Exports increased by 0.3% while imports were down by 14.1%, Bolat said.

The slowdown in shipments arriving from abroad follows aggressive interest-rate hikes by the Turkish central bank, which has pursued a policy to control credit growth since general elections in May. Exports have held up better even though Turkey’s biggest markets in Europe are showing signs of falling demand, Turkish exporters group TIM said.

The Turkish lira has lost about a third of its value against the dollar this year, with most of the declines taking place following the elections. The currency’s weakness also provided a boost to exporters and made some imports punishingly expensive for consumers.