I- CURRENT ACCOUNT

The current account balance posted net deficit of USD 2.959 million in January 2010, increasing from net deficit of USD 491 million observed in January 2009. This development is mainly attributable to increase in foreign trade deficit, according to the balance of payments presentation.

Foreign Trade

The foreign trade balance, according to the balance of payments presentation, indicated USD 2.654 million deficit in January 2010, reflecting 596,6 percent increase in comparison with the same month of 2009. As regards the sub-items, imports (CIF) including gold imports decreased by 23,9 percent to USD 11.504, while exports (FOB) decreased by 0,3 percent to USD 7.864 million and shuttle trade revenues are estimated to decrease by 2,1 percent to USD 334 million.

Services

Based on the estimates of TURKSTAT for January 2010, the travel revenues decreased by 3,8 percent to USD 769 million and the travel expenditures increased by 4,6 percent to USD 295 million in comparison with the first month of 2009. As a result, the net travel revenues are estimated to record USD 474 million in January 2010 reflecting a decrease by 8,3 percent over the same month of 2009.

The other important item of this category, transportation balance, which had recorded a net outflow of USD 117 million in the first month of 2009, also recorded a net outflow of USD 63 million in the same month of this year. As regards to sub-items in January 2010, freight expenditures recorded a net deficit of USD 156 million corresponding to 27,1 percent decrease, while other transportation showed a net surplus of USD 93 million reflecting 4,1 percent decrease over the first month of the previous year.

Revenues from construction services performed abroad by the resident construction companies decreased by 18,9 percent to USD 60 million in January 2010 in comparison with the same month of 2009.

Insurance services account, which consists of the data on insurance and reinsurance transactions with non-residents, showed net outflow of USD 57 million in January 2010 corresponding to 17,4 percent decrease over the first month of 2009.

As a result of these developments, trade in services generated a surplus of USD 182 million in January 2010 increasing 70,1 percent over the previous year’s figure of USD 107 million.

Income

Income account consisting of compensation of employees and investment income recorded a net outflow of USD 591 million in January 2010, increasing from USD 453 million observed in January 2009. The sub-items under investment income, namely direct investment, portfolio investments and other investment consisting of the interest income and expenditures recorded a net outflow of USD 68 million, USD 156 million and USD 358 million respectively in January 2010.

In comparison with January 2009, the interest expenditures of long and short-term loans decreased by 20,5 percent, realizing as USD 454 million in the first month of 2010.

Current Transfers

Current transfers recorded an inflow of USD 104 million in the first month of 2010 reflecting 55,9 percent decrease over the same month of the previous year. Specifically, General Government item recorded net revenue of USD 44 million in the first month, while the revenues from workers’ remittances under other sectors recorded a surplus of USD 69 million and other transfers posted a deficit of USD 9 million.

II- CAPITAL AND FINANCIAL ACCOUNTS

The financial account recorded a net capital inflow of USD 962 million in January 2010, in contrast to net outflow of USD 308 million observed in January 2009. The main developments under financial account during this period are summarized as follows:

Direct Investment

Non-residents’ net direct investment in Turkey, which includes the loans received from parent companies abroad and real estate purchases of non-residents in Turkey, recorded a net inflow of USD 316 million in January 2010, reflecting 78,9 percent decrease over the first month of 2009. As regards the sub-items, net real estate purchases of nonresidents in Turkey increase by 5,3 percent realizing as USD 120 million and net loans received from parent companies abroad recorded a net disbursement of USD 9 million in January 2010.

Residents’ net direct investment abroad recorded a net outflow of USD 37 million in the first month of this year, decreasing from USD 478 million in the same month of 2009.

As a result of these developments, net inflows in direct investment item decreased by 72,6 percent over the first month of 2009 realizing as USD 279 million in January 2010.

Portfolio Investment

Portfolio investment, which had resulted in a net outflow of USD 841 million in January 2009, showed a net inflow of USD 1.958 million in the same month of 2010.

As for the developments in portfolio investments’ assets side, it is observed that residents’ security transactions abroad recorded net purchases of USD 712 million in January 2009, and net purchases of USD 1.409 million in January 2010.

As for the developments in portfolio investments’ liabilities side, General Government borrowed USD 2 billion through the bond issues in the international capital markets in January 2010.

Non-residents’ security transactions associated with equity securities, which had recorded net sales of USD 104 million in the first month of 2009, indicated net purchases of USD 410 million in January 2010. As regards the government debt securities issued in the domestic capital market, non-residents realized net purchases of USD 957 million in January 2010, in contrast to net sales of USD 1.025 million in January 2009.

Other Investments

The other investment account, which is composed of trade credits, loans and foreign exchange deposit accounts, recorded a net outflow of USD 531 million in January of this year, decreasing from USD 859 million realized in January 2009.

a. Assets

As regards the trade credits, which are extended to non-residents in return for exports, indicated a net repayment of USD 1.031 million in January 2010, increasing from USD 428 million observed in the same month of the previous year. As regards to loans, an amount of USD 211 million was extended to non-residents in January 2010, increasing from USD 66 million in January of the previous year.

Banks’ foreign exchange holdings with foreign correspondents, which had increased by USD 600 million in the first month of 2009, recorded a decrease of USD 1.710 million in the same month of 2010.

b. Liabilities

The liabilities of other investment, which had decreased by USD 621 million in the first month of 2009, also decreased by USD 3.061 million in January 2010.

As regards to the subcategories of liabilities, trade credits, which are provided for imports, indicated a net repayment of USD 460 million in January 2010, decreasing from net repayment of USD 484 million observed in the same month of 2009.

With regard to the sub-categories of the loans, the General Government realized net disbursement of USD 329 million for the long-term loans received from international capital markets and other international organizations in January 2010. As regards the other sectors, the banking sector realized a net repayment of USD 1.051 million and other sectors realized net repayment of USD 1.023 million in January 2010, increasing from net repayments of USD 208 million and USD 383 million observed in January 2009 respectively.

Currency and deposits item, which is composed of the deposits of nonresidents held with the Central Bank and the resident banks, which showed an increase of USD 581 million in January 2009, recorded a net decrease of USD 853 million in the same month of 2010. Specifically, non-resident banks’ net deposit holdings in Turkey recorded a net decrease of USD 1.262 million in January 2010.

Reserve Assets

Official reserves, a sub-item under reserve assets, recorded a increase by USD 744 million in the first month of 2010, in contrast to USD 372 million decrease posted in the same month of 2009.

	*DETAILED PRESENTATION ()**	2009	2010
	(Million US Dollars)	January	January
I -	CURRENT ACCOUNT	-491	-2959
	Goods, Services and Income (A+B+C)	-727	-3063
	Goods and Services (A+B)	-274	-2472
A.	GOODS	-381	-2654
	Exports	8370	8334
	Imports	-8751	-10988
1.	General Merchandise	-1295	-2758
1.1.	Exports f.o.b.	7401	8170
1.1.1.	Exports f.o.b.	7885	7864
1.1.2.	Shuttle trade	341	334
1.1.3.	Adjustment: Coverage	-825	-28
1.2.	Imports f.o.b.	-8696	-10928
1.2.1.	Imports c.i.f.	-9282	-11504
1.2.2.	Adjustment: Classification	651	652
1.2.3.	Adjustment: Coverage	-65	-76
2.	Non Monetary Gold (net)	943	120
	Exports	957	146
	Imports	-14	-26
3.	Goods procured in ports by carriers	-29	-16
	Exports	12	18
	Imports	-41	-34
B.	SERVICES	107	182
	Credit	1521	1459
	Debit	-1414	-1277
1.	Transportation	-117	-63
	Credit	403	410
	Debit	-520	-473
1.1.	Freight	-214	-156
	Credit	192	189
	Debit	-406	-345
1.2.	Other Transportation	97	93
	Credit	211	221
	Debit	-114	-128
2.	Travel	517	474
	Credit	799	769
	Debit	-282	-295
3.	Construction Services	74	60
	Credit	74	60
	Debit	0	0
4.	Insurance Services	-69	-57
	Credit	56	44
	Debit	-125	-101
5.	Financial Services	-13	-21
	Credit	46	39
	Debit	-59	-60
6.	Other Business Services	-190	-118
	Credit	21	22
	Debit	-211	-140
7.	Government Services	-113	-48
	Credit	19	21
	Debit	-132	-69
8.	Other Services	18	-45
	Credit	103	94
	Debit	-85	-139
C.	INCOME	-453	-591
	Credit	576	481
	Debit	-1029	-1072
1.	Compensation of Employees	-7	-9
	Credit	3	4
	Debit	-10	-13
2.	Investment Income	-446	-582
	Credit	573	477
	Debit	-1019	-1059
2.1.	Direct Investment	-38	-68
	Credit	2	8
	Debit	-40	-76
2.2.	Portfolio Investment	-40	-156
	Credit	368	373
	Debit	-408	-529
2.3.	Other Investment	-368	-358
2.3.1.	Interest Income	203	96
2.3.2.	Interest Expenditure	-571	-454
2.3.2.1.	Long Term	-520	-430
2.3.2.1.1.	Monetary Authority	-24	-22
2.3.2.1.2.	General Government	-30	-22
2.3.2.1.3.	Banks	-121	-84
2.3.2.1.4.	Other Sector	-345	-302
2.3.2.2.	Short Term	-51	-24
D.	CURRENT TRANSFERS	236	104
1.	General Government	188	44
2.	Other Sectors	48	60
2.1.	Workers Remittances	64	69
2.2.	Other Transfers	-16	-9
II -	CAPITAL AND FINANCIAL ACCOUNT	-308	962
A.	CAPITAL ACCOUNT	0	0
1.	Migrants' transfers	0	0
B.	FINANCIAL ACCOUNT	-308	962
1.	Direct Investment	1020	279
1.1.	Abroad	-478	-37
	Inflow	0	1
	Outflow	-478	-38
1.2.	In Turkey	1498	316
1.2.1.	Equity Capital	1298	187
	Inflow	1298	188
	Outflow	0	-1
1.2.2.	Other Capital (Net)	86	9
1.2.3.	Real Estate (Net)	114	120
2.	Portfolio Investment	-841	1958
2.1.	Assets	-712	-1409
2.1.1	General Government	0	0
2.1.2	Banks	-326	-1339
2.1.3	Other Sectors	-386	-70
2.2.	Liabilities	-129	3367
2.2.1.	Equity Securities	-104	410
2.2.2.	Debt Securities	-25	2957
2.2.2.1.	Monetary Authority	0	0
2.2.2.2.	General Government	-25	2957
2.2.2.2.1.	In Turkey	-1025	957
2.2.2.2.2.	Abroad	1000	2000
2.2.2.2.2.1.	Borrowing	1000	2000
2.2.2.2.2.2.	Repayment	0	0
2.2.2.3.	Banks	0	0
3.	Other Investment	-859	-531
3.1.	Assets	-238	2530
3.1.1.	Trade Credits	428	1031
3.1.1.1.	Credits Extended	-4816	-4902
3.1.1.2.	Repayments	5244	5933
3.1.2.	Loans	-66	-211
3.1.2.1.	Monetary Authority	-51	-31
3.1.2.2.	Banks	-15	-180
3.1.3.	Currency and Deposits	-600	1710
3.1.4.	OtherAssets	0	0
3.1.4.1.	Monetary Authority	0	0
3.1.4.2.	Other Sectors	0	0
3.2.	Liabilities	-621	-3061
3.2.1.	Trade Credits	-484	-460
3.2.1.1.	Long Term	-5	-14
3.2.1.1.1	Drawings	5	36
3.2.1.1.2	Repayments	-10	-50
3.2.1.2.	Short Term	-479	-446
3.2.1.2.1	Drawings	4008	4274
3.2.1.2.2	Repayments	-4487	-4720
3.2.2.	Loans	-715	-1745
3.2.2.1.	Monetary Authority	0	0
3.2.2.1.1.	Use of Fund Credits and Loans	0	0
3.2.2.1.1.1.	Drawings	0	0
3.2.2.1.1.2.	Repayments	0	0
3.2.2.1.2.	Long Term	0	0
3.2.2.1.2.1.	Drawings	0	0
3.2.2.1.2.2.	Repayments	0	0
3.2.2.1.3.	Short Term	0	0
3.2.2.2.	General Government	-124	329
3.2.2.2.1.	Use of Fund Credits and Loans	-234	0
3.2.2.2.1.1.	Drawings	0	0
3.2.2.2.1.2.	Repayments	-234	0
3.2.2.2.2.	Long Term	110	329
3.2.2.2.2.1	Drawings	178	394
3.2.2.2.2.2	Repayments	-68	-65
3.2.2.2.3.	Short Term	0	0
3.2.2.3.	Banks	-208	-1051
3.2.2.3.1.	Long Term	372	-96
3.2.2.3.1.1.	Drawings	732	150
3.2.2.3.1.2.	Repayments	-360	-246
3.2.2.3.2.	Short Term	-580	-955
3.2.2.4.	Other Sectors	-383	-1023
3.2.2.4.1.	Long Term	-457	-1121
3.2.2.4.1.1.	Drawings	2527	2350
3.2.2.4.1.2.	Repayments	-2984	-3471
3.2.2.4.2.	Short Term	74	98
3.2.3.	Currency and Deposits	581	-853
3.2.3.1.	Monetary Authority	-69	-8
3.2.3.1.1.	Long Term	-57	-6
3.2.3.1.2.	Short Term	-12	-2
3.2.3.2.	Banks	650	-845
3.2.3.2.1.	Banks	504	-1262
3.2.3.2.2.	Other Sectors	146	417
3.2.4.	Other Liabilities	-3	-3
4.	Reserve Assets	372	-744
4.1.	Reserve Position in the Fund	0	0
4.2.	Foreign Exchange	372	-744
4.2.1.	Currency and Deposits	294	320
4.2.2.	Securities	78	-1064
III -	NET ERRORS AND OMISSIONS	799	1997

*() PROVISIONAL**