TL depreciated by 33 percent. Currency failed to protect protected TL

While the Currency Protected Deposit (KKM) accounts, which the government put into effect a year ago to control the dollar, reached 1.4 trillion liras, they were not enough to protect the Turkish lira.

After 1 year, the dollar came back to the same level and KKM, which lowered the dollar overnight, put a huge burden of 91.5 billion liras on the Treasury, that is, on the citizens.

In the same period, the size of the payments made by the Central Bank for the KKM has not been disclosed to the public yet.

With the shock effect of KKM, which was put into use with the increase of the dollar to 18.7658 liras on December 20, 2021, the dollar decreased to 10.1565 liras. However, it could not hold at these levels.

The loss of TL against the dollar exceeded 33%.

This loss made TL the second currency with the highest loss among developing countries. The Argentine Peso, on the other hand, took the first place with 41% depreciation against the dollar.


The economy administration, which disabled the interest policy, resorted to a series of additional measures as inflation got out of control and climbed to 85.5 percent. In order to fully realize the base effect-induced decline in inflation, the depreciation of TL had to be kept low.


Since the volatility in the dollar exchange rate has not earned foreign exchange income for the last two months for those who keep their money in KKM, the demand is gradually losing its demand. The rate of increase in KKM, which has reached 1.46 trillion liras (79 billion dollars), has come to a standstill as of November.

The direction of the savings in these accounts is being watched carefully. For now, there is no transition to foreign currency, but analysts point out that the tendency to the stock market, which has become the only investment alternative against inflation, is increasing. According to BRSA data, as of December 9, the share of KKM in total deposits was 17 percent.

The weight of foreign currency deposits decreased to 49.2 percent. However, economists stated that KKM should be accepted as a foreign currency because it is under a kind of foreign currency indexation practice and the dollarization has increased to 67.7 percent.