LONDON/ANKARA - Farouk Soussa, analyst for Turkey of the leading international credit rating organization Standard & Poor`s, said on Friday that sustainability of (Turkey`s) current account deficit depends on the level of direct foreign capital inflow.
In an exclusive interview with the A.A, Soussa said that current account deficit was being financed by foreign capital. He added that the increase in inflow of direct foreign capital was the most important factor in keeping current account deficit on a sustainable level.
Stressing that the government`s reform package had made a quite important contribution to increase the foreign capital inflow, Soussa said, "Despite increased foreign direct capital, continuing strong short-term capital inflows may put the lira at risk of sharp devaluation in the medium term," he said.
He also added that continuation of macro-stability policies was of great importance to prevent negative impact of short-term capital inflows.