Turkish Banking Sector Can Manage Funding, Liquidity Risks: Central Bank

Turkey's banking sector has adequate buffers to manage funding and liquidity risks, the Central Bank said in a report released on Friday.

"The outlook for the asset quality of the banking sector remains positive," Sahap Kavcioglu, the bank's governor, said in the preface of the 33rd Financial Stability Report.

The sector's profitability, which has improved with the increase in net interest income, backs up capital adequacy, he said.

The report said Turkey's current account balance has improved significantly thanks to buoyant exports and recovering services revenues, particularly in tourism.

"Strong economic activity has been mirrored favorably in the corporate sector's turnover, profitability, and liquidity indicators," read the report.

It said the total and short-term foreign exchange positions of the corporate sector have continued to improve, while the corporate sector and household indebtedness ratios also declined to pre-pandemic levels. -