The yield on two-year debt fell below 7.6 percent, a level last seen in mid-January 2011. Its decline was the result of the country's improving terms of trade, a reality better recognized by observers after the Turkish Statistics Institute (TurkStat) announced June foreign trade figures on Tuesday. The institute showed exports nearly 17 percent higher at $13.26 billion, and imports more than 5 percent lower at $20.4 billion in June compared to the same month a year earlier. Thus, the foreign trade deficit of the country was $7.2 billion for the sixth month of the year, compared to more than $10 billion in June of last year. For the January-June period, it was also revealed Tuesday, Turkey's deficit stemming from its trade with other nations was some $43 billion, against $55 billion for the same six months of 2011. “I cannot say that we will not even be touched by the [ongoing] crisis in Europe because we already are impacted by it, but my belief is that we are going to get through all these troubles easily given our performance so far [this year],” Economy Minister Zafer Çağlayan said on Tuesday, referring to the TurkStat figures announced the same day.
The interest rate on the same government bonds went up as high as 11.5 percent at the beginning of this year when worries about the Turkish economy peaked with a deteriorating balance of payments. That outlook is, however, long gone now. In parallel to the shrinking foreign trade deficit, the country's current account deficit (CAD) has also been tamed. According to the latest available figures, it dropped to $27 billion in the first five months of the year, a quarter less than the CAD of the same period a year earlier.