Turkish central bank officials have discussed making an accounting change to book the national lender’s unrealised gains and losses in its so-called revaluation account, accrued due to changes in the market value of its foreign-currency and gold holdings, an unnamed person familiar with the matter told Bloomberg on October 22.
The move, if realised, would pave the way for the central bank to record higher profits and subsequently transfer higher dividends to the Treasury.
It is unclear how advanced the discussions are or whether they would result in a policy change, according to the news agency.
The central bank had Turkish lira (TRY) 61bn ($11bn) in its revaluation account as of October 21.
Even TRY80bn of transfers from the central bank to the Treasury so far this year has not stopped the widening of the government budget deficit. The Treasury’s policy of focusing on short-term borrowing since last year with the aim of avoiding the payment of high interest rates in the long run caused an accumulation of debt redemptions in 2020.
|Domestic Government Debt Auctions and Borrowing Programme|
|10-Jun||05/13/2020||336-day Zero Coupon (new)||6.9||5.3||1.1||1.1||24.45|
|10-Jun||06/05/2024||5-year CPI-indexed Semi-annual Coupon (new)||2.8||2.2||0.4||0.4||4.15|
|11-Jun||04/21/2021||2-year Fixed Semi-annual (benchmark) (re-open)||4.4||3.5||1.1||1.1||22.83|
|11-Jun||08/06/2025||6-year floating semi-annual (re-open)||2.6||2.1||0.4||0.4||20.89|
|18-Jun||06/16/2021||2-year lease certificate (direct sale) (semi-annual)||1.6||10.55|
|18-Jun||12/11/2019||6-month lease c. (to pension funds, unscheduled)||3.9||2.1||-||-||23.49|
|8-Jul||09/16/2020||434-day Zero Coupon (new issue)||12.7||9.7||0.8||0.8||20.6|
|8-Jul||06/05/2024||5-year CPI-indexed semi-annual (re-open)||3.3||2.6||0.4||0.4||4.17|
|9-Jul||10/09/2019||3-month bill (new issue)||3.7||2.1||0.1||0.1||22.25|
|9-Jul||04/21/2021||2-year Fixed Semi-annual (benchmark) (re-open)||7.7||6.1||1.8||1.8||19.35|
|9-Jul||08/06/2025||6-year floating semi-annual (re-open)||4.2||2.9||0.8||0.8||20.3|
|19-Aug||09/16/2020||392-day Zero Coupon (re-open)||5.3||3.4||1.4||1.4||15.3|
|19-Aug||08/06/2025||6-year floating semi-annual (re-open)||2.9||1.2||0.2||0.2||22.65|
|20-Aug||08/10/2021||2-year lease certificate (direct sale) (semi-annual)||0.8||7.4|
|20-Aug||06/05/2024||5-year CPI-indexed semi-annual (re-open)||4.0||2.9||0.2||0.2||4.03|
|16-Sep||04/21/2021||2-year Fixed Semi-annual (benchmark) (re-open)||8.1||3.0||1.1||1.1||15.44|
|16-Sep||06/05/2024||5-year CPI-indexed semi-annual (re-open)||1.6||0.9||0.3||0.3||4|
|17-Sep||10/07/2020||385-day Zero Coupon (new)||4.7||2.7||0.5||0.5||15.18|
|17-Sep||08/06/2025||6-year floating semi-annual (re-open)||1.3||1.0||0.3||0.3||22.63|
|17-Sep||17/09/2021||Gold-backed lease certificate (kg) (6-month coupon)||17.0||1|
|17-Sep||17/09/2021||Gold-backed bond (kg) (6-month coupon)||4.0||1|
|21-Oct||01/08/2020||3-month bill (new issue)||2.1||1.3||-||-||14|
|21-Oct||10/20/2021||2-year Fixed Semi-annual (benchmark) (new issue)||4.7||3.1||0.7||0.7||14.47|
|22-Oct||10/07/2020||350-day Zero Coupon (re-open)||3.0||2.2||0.5||0.5||14.18|
|22-Oct||06/05/2024||5-year CPI-indexed semi-annual (re-open)||1.2||0.6||-||-||3.97|
|11-Nov||20/10/2021||2-year Fixed Semi-annual (benchmark) (re-open)|
|11-Nov||06/11/2024||5-year CPI-indexed semi-annual (new)|
|12-Nov||10/07/2020||329-day Zero Coupon (re-open)|
|12-Nov||11/06/2024||5-year CPI-indexed semi-annual (direct sale)|
|12-Nov||04/11/2026||7-year floating semi-annual (new)|
|9-Dec||6-month bill & 2-year benchmark|
|10-Dec||5-year CPI-indexed & 7-year floating|
The average maturity on the Turkish government’s domestic debt fell to 3.2 years in September from 3.9 years in 2018 and 4.2 years in 2017.
The Treasury is scheduled to redeem TRY75bn worth of lira debt in the first quarter of 2020, the highest figure seen since 2005, the year when the current data set was initiated.
The budget deficit grew by 51% y/y to TRY86bn in January-September.
Meanwhile, the government is working on a draft tax bill to increase income tax on high income levels and to reduce corporate tax levied on non-financials. A luxury real estate tax will also be introduced while vehicle and transportation expenses will be capped in terms of tax reductions.
The government is also planning to introduce a 7.5% tax on US technology companies including Google, Facebook and Amazon.