With the Central Bank and the Treasury releasing the interest first, the volume of KKM increased by approximately 1 trillion liras. 63% of total deposits are indexed to foreign currency.
Mehtap ÖZCAN ERTÜRK
Release: 05:30 – 26 May 2023 Updated:
Currency Protected Deposit (KKM) accounts, which took the heavy work of the banking sector, increased to 2 trillion 398 billion 169 million liras (121.3 billion dollars) as of May 18, while the weekly increase was 51.4 billion liras. According to the data of the Banking Regulation and Supervision Agency (BDDK), the increase in KKM accounts has continued uninterrupted since January 26, when the interest ceiling on the Central Bank’s liabilities was lifted. In the 16 weeks in question, an increase of 991 billion 320 million liras was observed in the volume of KKM. The interest ceiling, which was ‘policy interest plus 3 points’ in KKM, was lifted at the end of January 2023 for products converted from foreign currency, and at the end of March 2023 for products with TL conversion, and KKM with a maturity of 1 month was introduced for companies with a foreign exchange deficit. With the abolition of the limit on interest, banks entered a fast race. While interest in KKM increased with the rise in interest rates, the Central Bank took another step. After May 14, additional conversion obligations from foreign currency to TL were increased. Thus, as the transition to KKM accounts accelerated, banks started to increase not only interest but also premiums in order to direct their customers to more KKM and to increase the attractiveness of the product.
ADVANCE BONUS IS ATTRACTIVE
The foreign currency KKM ‘cash premium’ interest rates, which were at the levels of 20-25 percent last week, are seen at 36-40 percent levels this week. Thanks to the cash premium, for example, a 10 percent premium dollar is deposited immediately to the customer’s account for a 3-month maturity. After 3 months, TL interest or exchange protection difference is given separately, depending on the exchange rate. Considering the KKM, which economists consider as foreign currency deposits because they are indexed to foreign currency, and foreign currency deposits, their share in total deposits reached 63.27 percent. Since December 2020, when KKM was commissioned, an increase of 90 billion dollars is calculated in foreign currency and foreign currency indexed ets.
$1 billion in sales in gold accounts
While the total foreign currency deposits in banks were 217 billion 240 million dollars last week, 183 billion dollars of this amount was collected in the accounts of residents. Total foreign currency deposits of domestic residents decreased by 1 billion 671 million dollars as of May 18, adjusted for parity effect. All of this decrease occurred in real person, that is, individual accounts. In the week of May 18, when grams of gold peaked, sales of 1 billion 74 million dollars were observed from the precious metal currency accounts of individuals.