Mystery Money Flows Help Turkey Finance Widening Foreign Gap

Mystery capital flows into Turkey have reached new highs, allowing policy makers to boost foreign reserves despite a growing trade deficit and weak demand for lira assets.

The central bank in Ankara said Monday that money it can’t account for in the monthly balance-of-payments data rose to $5.5 billion in July, taking the tally during the first seven months of the year to $24.4 billion. Both are records, according to data going back nearly four decades.

In the past, the central bank has said unexplained inflows probably came from Turks bringing cash savings into the banking system, especially when the lira is weak, or depositing foreign currency they earn from tourists.

Current-account data include predictions typically based on long-running spending patterns, and if those assumptions are now outdated, that could explain some of this year’s surge.