The Central Bank of the Republic of Turkiye (CBRT) continues its steps to transform the banking system in a way that makes the Turkish lira (TL) attractive.
CBRT’s communiqués on the subject were published in the Official Gazette.
Accordingly, banks may give interest below the policy rate to foreign currency converted exchange rate protected accounts, but this rate cannot be lower than 85% of the 1-week repo auction interest rate, which is the policy rate. Thus, while standard TL deposits will be supported, the attractiveness of the interest given to foreign currency converted exchange rate protected deposits (KKM) will be reduced.
Additionally, a technical change was made to the date requirement of real person conversion accounts. Accordingly, domestic real persons will be able to convert their gold, dollar, euro and British pound deposit and participation fund accounts in banks into TL as of November 30, 2023.
In foreign currency converted exchange rate protected deposit accounts where rates lower than the policy interest of the Central Bank are applied, if the exchange rate difference is higher than the interest or dividend to be paid by the bank but lower than the amount calculated with the policy interest, the entire difference will be covered by the bank.
If the exchange rate difference is higher than the amount calculated with the policy interest, the part of the support amount up to the amount calculated with the policy interest will be paid by the bank, and the part above will be paid by the CBRT.
Central Bank aims to make TL deposits attractive
CBRT took a series of steps to make TL deposits attractive.
In line with the data showing that the transition to TL is accelerating, the TL share increase target, which was set as 2% per month for real persons, was increased to 2.5% in September and 3.5% in October.
Source: Trthaber / Prepared by Irem Yildiz