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Turkey could sell debt for 8 billion EUR, according to a regulatory report filed in the United States. This may signal that the government in Ankara is preparing to boost borrowing to fill the growing budget deficit. Turkey may offer sovereign bonds from time to time in one or more bids and will use proceeds for general financial purposes, which may include debt repayment, according to a prospectus published on the US Securities and Exchange Commission.

The government has increased spending to boost growth and central bankers said they could exceed their budget deficit target of 1.7% this year by up to 1 percentage point.

The government has already sold debt in foreign currency for 6.25 billion USD in 2017, overtaking its annual target. At the same time, analysts say plans for local borrowing in July suggest that selling debt in TRY will outweigh the redemption of bonds this year for the first time since 2009.

So far, the fiscal downturn is not enough to frighten the bond market, which is experiencing increased foreign demand, as the central bank’s efforts to halt the fall in the local currency have prompted a currency exchange rate increase and an over-11% yield, creating one Of the two best opportunities in world trade-in trade. The debt-to-GDP ratio is about 30% by the end of 2016, which is half the level a decade ago and is relatively good for most emerging markets.

The moment is not that bad due to the calm of the markets and the decline in the cost of credit default swaps in Turkey. Newly issued Turkish bonds maturing in 2047 are traded at record high prices, so it seems that the markets so far enjoy the credit. Turkish bonds denominated in dollars and maturing in May 2047, which were issued earlier this month with a coupon of 5.75%, traded at about 99.07 USD on Friday, compared to 95.8 USD a couple of weeks ago. The cost of insuring government debt against insolvency for five years through the use of credit default swaps is below 200 basis points, which is the lowest level of over 2 years.

