Currency-protected deposits and the Central Bank’s liraization strategy, which were implemented in the last week of last year in order to increase the attractiveness of the Turkish lira and reduce dollarization, enabled the Turkish lira to be preferred for deposits and loans. In the first 9 months of the year, when TL deposits doubled, there was a record decrease in foreign currency loans. According to the data of the Banking Regulation and Supervision Agency, there was an increase of 60 billion lira in TL deposits in just a single day on 13 September. The increase in TL deposits in the last 1 month has exceeded a quarter trillion.
60 BILLION TL INCREASE IN 1 DAY
According to BRSA data, the total size of TL deposits, which was 3 trillion 408 billion TL on 11 August, reached the highest level in its history with 3 trillion 659 billion TL as of 13 September. In this period, the increase in TL deposits was 251 billion TL. TL deposits, on the other hand, increased by 60 billion liras in just one day compared to their size of 3 trillion 599 billion liras on September 12, and caught the biggest daily rise in history. As of September 13, when the total deposits were 7 trillion 966 billion TL, the share of TL deposits in the system reached 46 percent. Since the last week of 2021, when the currency-protected deposit application started, there has been a double increase in TL deposits. The increase in TL deposits, which was 1 trillion 833 billion liras on December 22, 2021, reached 100 percent compared to the level of 3 trillion 659 billion reached as of September 13, 2022. At the end of 2021, the share of TL deposits in total deposits was 37%. In the same period, the size of foreign exchange accounts decreased by 24 billion 260 million dollars.
INTEREST IN FOREIGN EXCHANGE DECREASED
According to Sabah’s report, It was observed that the demand for foreign currency also decreased with the exchange-protected deposit application. In the period from 11 August to 13 September, when TL deposits increased by a quarter trillion, foreign exchange accounts decreased by 4 billion 331 million dollars from 241.7 billion dollars to 237.3 billion dollars. In this period, 3.2 billion dollars in individual foreign exchange accounts and 1.1 billion dollars in corporate accounts were resolved.
TARGET TL WEIGHTED FINANCIAL STRUCTURE
The Central Bank of the Republic of Turkey (CBRT) continues to bear fruit, as one of the main elements of the Turkish Economy Model, which aims to achieve sustainable price stability through investment, employment, production and exports, and the liraization strategy that it has put into practice. CBRT Chairman Şahap Kavcıoğlu, in his blog post published in the Center’s Diary last week, stated that, together with the Liraization strategy, the weight of Turkish lira denominated items in the assets and liabilities of households, firms and banking sectors should be gradually increased, so that the financial system as a whole has a Turkish lira-weighted structure. He stated that he was aiming to Kavcıoğlu said, “With our liraization strategy, we are building the monetary policy pillars of our economic model and focusing on permanent reforms that will ensure sustainable price stability within the framework of free market dynamics. Our main priority is to solve the high local currency substitution problem, which has been a structural problem in the fight against inflation for many years, thanks to the liraization strategy, and to ensure permanent price stability. is to ensure the sustainability of the external balance”.
CREDITS ALSO TURNED INTO TL
The liraization strategy implemented by MERKEZ Bank also showed its effect on loans. Of the total credit volume of 4 trillion 635 billion liras on 24 December 2021, 2 trillion 815 billion liras and 60 percent were TL loans, and 157 billion 739 million dollars (1 trillion 820 billion liras) were 40 percent foreign currency loans. On September 9, 2022, 63 percent of the total loan volume of 6 trillion 690 billion TL was TL loans with 4 trillion 210 billion TL. The size of foreign exchange loans decreased to 136 billion 777 million dollars. The decrease in FX loan volume reached 20.9 billion dollars.
KKM PASSES 1.3 TRILLION
Of the $24.3 billion dissolution in foreign exchange accounts since December 22, 2021, when the KUR-protected deposit application came into effect, $17.2 billion was in individual accounts and $7.1 billion in companies’ accounts. As of September 9, 2022, the size of currency-protected deposit accounts reached 1 trillion 327 billion liras. The number of real and legal investors in foreign currency-protected deposit and participation accounts reached 2 million 138 thousand 489 in total.